After seeing its shares hit new lows in the U.S., Qihoo 360, a Chinese internet security company, may just become the latest – and the largest – Chinese company to escape from New York, according to the Financial Times (paywall).
The company, known for its various anti-virus programs, announced Wednesday that it has received a management buyout offer from a consortium led by its CEO and Chairman, Zhou Hongyi.
The $77 per share offer represents a 33% premium over the stock’s average price for the month, and could lead the company to join the recent trend of China-based, New York-listed tech companies in delisting in the U.S. in favor of relisting in their home country to take advantage of the region’s rip roaring stock market.
At $9 billion, Qihoo will so far become the biggest company to do this. But with tech firms in Shenzhen currently trading at 34 times earnings, it surely won’t be the last. Analysts over at Nomura had this to say:
“A big cow like Qihoo was triggered to go private because of its long-time low valuation in the US market… …we believe Qihoo’s going private transaction could lead the trend for more quality companies to head back to more familiar waters.”
Unsurprisingly, this trend has sparked another trend: merger arb bets on who’ll be next.
Photo credit: spencer hickman via Flickr