YY, Dangdang Receive Going-Private Offers

YY Inc. and Dangdang Inc. both received buyout offers from top executives on Thursday, the latest Chinese businesses to receive such proposals.

In YY's case, the offer values the company at about $3.7 billion. Dangdang's offer values the company at about $630 million.

YY Chairman Jun Lei and Chief Executive David Xueling Li have proposed to buy all shares outstanding they don't already own for $68.50 per American depositary share, representing a 17.4% premium on the trading price on July 8.

The buyer group already owns about 35.7% of the issued and shares outstanding and has 75.1% of the voting power of the company. It intends to fund the buyout with debt and equity capital.

Guangzhou-based YY is a social platform that lets users text and video each other. It joins the ranks of Chinese companies that have received similar proposals recently, such as JA Solar Holdings Co., Taomee Holdings Ltd., Renren Inc. and 21Vianet Group Inc.

Beijing-based Dangdang Inc, a business-to-consumer e-commerce company, received an offer from Chairwoman Peggy Yu Yu and Chief Executive Guoqing Li. Their offer of $7.812 in cash per American depositary share is a 20% premium from July 8. Dangdang's buyer group owns 39.5% of the company's shares and have 83.5% of the voting power.

A flood of going-private offers have been made recently, far outnumbering the five approaches of U.S-listed Chinese firms that were made from January to May of this year, according to Deal Point Data. Of those five approaches, three were management-led.

The Chinese stock market had been surging, though stocks have fallen steeply in recent weeks and have remained volatile. Dangdang saw its shares plunge 30% in the past two weeks.

Write to Angela Chen at [e-mail]

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