The 30+ pending buyouts of US listed Chinese companies are driven by the higher valuations available to similar businesses in the domestic Chinese equity market. But recent announcements demonstrate ways that companies can issue shares in China without undergoing privatization restructuring and relisting:
- Soufun will inject assets into an existing Shanghai listed shell company
- CNinsure will list its claims adjusting business on China’s New Third Board
- Skypeople Fruit Juice will list its main operating subsidiary on China’s New Third Board
Successful execution of these plans would provide these companies with access to new equity on attractive terms and existing shareholders of these US listed companies with visibility into the higher fair value of their businesses.