Qihoo, a Beijing-based developer of security software and Internet browsers, announced on Friday that it will go private in a deal worth $9.3 billion. As Reuters notes, this makes Qihoo the latest in a growing list of U.S.-listed Chinese tech firms that have decided to go private.
Qihoo held its initial public offering on NASDAQ in March 2011 as QIHU. The company’s plans to go private after four years of trading in the U.S. were first revealed in June, when chairman and chief executive officer Zhou Hongyi said he wanted to lead a buyout. The final deal will give investors a premium of 16.6 percent to the closing price of Qihoo’s shares of $66.05 on June 16, the day before it was notified of Zhou’s offer.
Bloomberg Business notes that 38 U.S.-listed Chinese companies received offers this year to go private, though only five have finished the buyout process so far. These include tech firms Shanda Games and WuXi PharmaTech. Online dating service Jiayuan.com has also agreed to go private. The Qihoo deal is especially notable because of its size. According to the Wall Street Journal, it is the “largest take-private deal of a U.S.-listed Chinese company” so far.
Going private gives these companies the option of being purchased by private companies in reverse mergers or relisting on the volatile but fast-growing Chinese stock market. The Chinese government is keen to get more companies to list domestically and is offering a number of initiatives, including cutting interest rates, reducing stock market transaction fees, and making it less complicated to secure foreign investment.
Qihoo expects to finalize the process of going private in the first half of 2016.