China take-private wave continues despite A-share crash

Author: Ashley Lee | Published: 13 Jul 2015

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...