Jumei International Holding Ltd. has received a nonbinding proposal letter to take the company private.
The company, which operates as Jumei.com, is China’s largest online beauty e-tailer. The letter was sent to its board on Wednesday from the buying group comprised of Leo Ou Chen, founder, chairman and chief executive officer of the firm; Yusen Dai, cofounder, director and vice president of products, and venture capital firm Sequoia Capital.
Sequoia, which has been backing the company, took the Beijing-based firm public on May 16, 2014. The shares trade on the New York Stock Exchange under the ticker symbol “JMEI.” The company in a shelf registration in April 2014 said it planned to raise around $400 million in its initial public offering. On the day of its IPO, it sold 11.1 million American depositary shares and raised $245.1 million. At the time, the shares priced at $22 each and rose as high as $28.28 on its first day of trading. That gave the company a valuation of $4.02 billion back then. Shares of the company rose as high as $39.45 on Aug. 18, 2014, in intraday trading.
Related Articles
Following disclosure of the letter, shares of Jumei rose 8.2 percent around noontime trading to $6.32. Its current market capitalization is $925.06 million.
You May Also Like
According to the letter, the nonbinding “going-private” proposal would have the buying group acquire the outstanding common shares of Jumei that they don’t already own at $7 in cash. The $7.00 per ADS represents a premium of 26.6 percent above the average closing price of the shares over the last 10 trading days.
In the letter, the buying group said it and its affiliates own 54.4 percent of the common shares and have 90.1 percent of the voting power of the company. It also said it intends to fund the transaction through a combination of debt and/or equity capital, and rollover equity in the company.
The Jumei board cautioned that the company hasn’t responded to the proposal, and that there is no guarantee that a definitive offer will be made.
In its letter to the board, the buying group said, “We believe that the acquisition will provide value to the company’s shareholders,” and noted that it is not planning on selling its stake in the company to a third party.
Jumei’s Internet platform offers consumers branded beauty products, apparel and other lifestyle products at jumei.com and jumeiglobal.com, as well as through its mobile application. The e-tailer has multiple sales formats, including curated sales, online shopping and flash sales.