China-based online media company Sina (NASDAQ: SINA) announced on Monday that it has received an offer to take the company private. Sina is the parent company of micro-blogging site Weibo (NASDAQ: WB), best known as the Chinese equivalent of Twitter.
The take-private proposal came from New Wave, a holding company controlled by Sina's CEO, Charles Chao. The deal offered $41 in cash per share, which would represent a 12% premium from the stock's closing price on Thursday and value the transaction at about $2.7 billion. New Wave already holds a 12% stake in Sina.
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Sina released a statement saying its board of directors had formed a committee of independent directors to evaluate the proposed deal.
The company spun off Weibo in 2014, but still holds a controlling stake, owning 45% of its shares and 71% of the voting rights.
Rising tensions between China and the U.S.
The U.S. Senate approved legislation back in May that imposes a number of strict criteria on foreign companies trading on U.S. stock exchanges. Companies would be required to certify that they are not owned or controlled by a foreign government, while also submitting their audit results to U.S. regulators for review. Businesses that failed to comply with the regulations could be barred from U.S. exchanges. The measure still has to be approved by the House of Representatives.
This move has sparked a wave of Chinese companies going private in recent months. Online classified ad company 58.com (NYSE: WUBA) and auto sales website Bitauto Holdings (NYSE: BITA) have both agreed to private takeover offers over the past month.
Other companies are considering abandoning the U.S. markets and listing on exchanges in Hong Kong or Shanghai. Search giant Baidu (NASDAQ: BIDU) is reportedly considering delisting from the Nasdaq stock exchange in reaction to the proposed legislation.
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Danny Vena owns shares of Baidu and Weibo. The Motley Fool owns shares of and recommends Baidu and Twitter. The Motley Fool recommends Nasdaq, Sina, and Weibo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
