A number of US-listed Chinese companies have announced plans
to delist, driven by record highs in the A-share markets and
new regulatory initiatives for variable interest entities
(VIEs). But the falling market could affect those deals.
Companies such as so-called flirting app owner Momo – which only listed in December
2014 – have received management buyout offers. Other
companies that have received offers include Qihoo 360, which, with a $10.06 billion offer,
would be the largest Chinese take-private so far.
The recent A-share crash is unlikely to halt all
these deals. While they are based on the high valuations that
these companies would receive in the domestic markets, some of
these companies are also seeking regulatory certainty.
And while the A-share valuations helped, lengthy deal
timelines meant that founders would struggle to take advantage
of record highs immediately. "If you’re doing a
take-private now, it is unlikely that you can finish...