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Weibo-owner Sina to go private in $2.6 billion deal with CEO-led firm

Published 09/28/2020, 05:54 AM
Updated 09/28/2020, 07:55 AM
© Reuters. Sina Weibo's booth is pictured at the GMIC in Beijing
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(Reuters) - Sina Corp (O:SINA), owner of social media platform Weibo (O:WB), will be taken private in a $2.6 billion deal with Chief Executive Officer Charles Chao, the Chinese internet company said on Monday.

The offer price of $43.3 per share is at an 18% premium to the stock's closing price on July 2, the last trading day before Sina received the preliminary offer of $41 per share.

U.S.-listed shares of Sina rose more than 6% in premarket trading.

Chao's holding company, New Wave, is the largest shareholder of Sina, with a 12.15% stake as of July 10, according to Refinitiv-Eikon data.

Many Chinese companies are opting out of U.S. stock exchanges, following rising tensions between the world's two largest economies, by considering go-private deals or returning to equity markets closer to home.

E-commerce firms Alibaba (N:BABA) and JD (NASDAQ:JD).com (HK:9618) have completed secondary listings in Hong Kong. Others including travel firm Ctrip (O:TCOM) and Baidu (O:BIDU) were considering Hong Kong listings, Reuters reported earlier this year.

Sina said Morgan Stanley (NYSE:MS) Asia Ltd is acting as a financial adviser to the special committee it had formed to evaluate the proposal.

© Reuters. Sina Weibo's booth is pictured at the GMIC in Beijing

The deal is expected to close during the first quarter of 2021, Sina said.

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