Qihoo 360 Signs Definitive Agreements With Investors For $9.3B Go-Private Deal

New York Stock Exchange-listed Qihoo 360 Technology Co. Ltd. has entered into a definitive merger agreement to be taken private by its chariman Zhou Hongyi and a group of investors for approximately US$9.3 billion, in the largest go-private deal of a U.S.-listed Chinese company, according to an announcement.

The deal includes the redemption of US$1.6 billion debt, and has won board approval. It still needs shareholder approval and is now expected to be completed in the first half of 2016.

The company will then be delisted from the New York Stock Exchange, and most likely seek a domestic listing in China.

The investors participating in the deal are CITIC Guoan Group, Golden Brick Capital Private Equity Fund I L.P., Sequoia Capital China I, L.P., Taikang Life Insurance, Ping An Insurance, Sunshine Insurance, New China Capital, Huatai Ruilian, Huasheng Capital.

The investor consortium is offering US$77 per American Depository Share (ADS) in cash, a premium of 16.6% to the company’s last closing price before the announcement on June 17.

The deal terms remained the same as in the initial proposal in June, even as the confidence in the deal’s completion was shaken after the Chinese stock market crash during the summer.

The buyers intend to fund the merger through a combination of cash contributions from the investors and the proceeds from a committed term loan facility in an amount up to the RMB equivalent of US$3 billion and a bridge loan facility of up to the RMB equivalent of US$400 million provided by China Merchants Bank Co., Ltd.

Qihoo 360 raised US$175 million via an initial public offering in 2011, selling 12 million shares at US$14.5 per share.

China Expert network