Chairman of China's Simcere Pharma Offers Buyout
China-based Simcere Pharmaceutical Group received a buyout offer from a consortium led by founder-chairman Jinsheng Ren for $9.56 per American depositary share (ADS), valuing the company at about $500 million.
The offer represents a premium of 19% to Simcere's Friday close of $8.06. The company's stock was up 14% in premarket trading on Monday.
Simcere, founded in 1995, said on Monday it has formed a special committee of independent directors to consider the proposal.
According to the proposal letter, dated March 11, the potential buyers intend to finance the deal with a combination of debt and equity capital.
If the deal is completed, Simcere, which makes drugs for cancer, and heart and brain diseases, will join a growing list of Chinese companies going private.
Chinese biotechnology firm 3SBio agreed in February to be taken private for about $340 million by a group led by its chief executive and a Chinese private equity firm..
Chinese companies are leaving the U.S. stock markets as government investigations of suspect financial reports and battered share prices have lowered their chances of raising new money in the United States.
Twenty-seven China-based companies with U.S. listings announced plans to go private through buyouts in 2012, up from 16 in 2011 and just six in 2010, according to investment bank Roth Capital Partners.
