Budget hotel chain 7 Days Group Holdings Ltd said on Thursday that some of its shareholders proposed a $634.7 million deal to take the company private.
The shareholders' consortium that made the proposal on Wednesday comprises the Carlyle Group, Sequoia Capital China, He Boquan, president of the company, and Zheng Nanyan, the company's chairman of the board.
The consortium members made a proposal to acquire all the outstanding shares not currently owned by them for $4.23 per ordinary share, and $12.7 per American Depositary Share, or ADS.
The proposal represents a premium of 20.2 percent compared with the closing price of the company's ADS on Sept 25.
The consortium plans to finance the deal with a combination of equity capital by its members and third-party debt.
The company expects its board of directors to form a special committee comprising independent directors to consider the proposal.
The company — the second-largest budget hotel company in the country by number of rooms — saw its total net revenue for the second quarter up 27.3 percent year-on-year to 632.7 million yuan ($99.6 million).
The company is listed in the New York Stock Exchange since Nov 20, 2009.
Other Chinese companies listed in the United States may consider going private due a lack of investor confidence in Chinese stocks and attacks by short-sellers.
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