Chinese Tech Company Sina To Go Private After 20 Years On Wall Street In $2.6 Billion Deal

KEY POINTS

Chinese online media company Sina delists from Nasdaq
Sina board approves merger deal, valuing company at $2.6 billion
This comes a day after Tencent announced taking search engine Soguo private

Chinese online media company Sina (Nasdaq: SINA) is exiting Nasdaq fter trading on Wall Street for 20 years, the latest casualty of the U.S. crackdown on tech companies based in China.

CEO Charles Chao and the board agreed on a merger deal with his Caymen Islands-registered New Wave Holdings, valuing the company at $2.6 billion, according to company statement. The merger is expected to close in the first quarter of 2021.

The offer price of $43.30 per share is at a 7.7% premium to the stock’s close Friday. This is a sweeter deal than the initial buyout proposal made by New Wave Holdings in July to take the company private at $41, the company said.

Sina, based in Beijing and owner of the popular Twitter-like social media app Weibo, listed on Nasdaq in 2000.

The Trump administration has tightened the net around Chinese tech companies following the recent tensions between Washington and Beijing over South China Sea and the origins of the coronavirus, affecting businesses of apps like TikTok, WeChat and chipmaker SMIC.

Growing scrutiny by U.S. regulators following the recent removal of Luckin Coffee from Nasdaq due to accounting irregularities has also forced Chinese companies, which were trying to tap U.S. markets, to shift focus to home and other countries.

Chinese search engine Sogou will be taken private by Tencent, in a deal valued at $3.5 billion. Companies like Alibaba and JD.com have also held secondary listings in Chinese stock exchanges as a safety net in recent months. Beijing’s Ant Group chose to list in Shanghai and Hong Kong despite the success of its financial affiliate Alibaba on Nasdaq in 2014.

China’s access to the American capital markets has been capped by new regulations requiring companies to be more transparent in their trading and business. Also, the U.S. President’s Working Group on Financial Markets published a report in August recommending ‘due diligence’ while investing in Chinese companies, pushing for more scrutiny.