Qihoo 360 Technology Co plans to get listed on the A-share market by the end of 2016 via a backdoor deal, news portal tech.qq.com reported on Tuesday.
The U.S.-listed company is expected to get all funds for its going-private transaction in mid-March 2016, said the report, citing documents from Huatai United Securities, an underwriter of the Qihoo buyout deal.
On December 18, the leading antivirus software provider in China said in a press release that it is in the process of being taken private by a consortium in a deal valued at approximately $9.3 billion, joining a series of U.S.-listed Chinese companies to get delisted this year.
A PR representative from Qihoo told the Global Times Tuesday that he had not heard of the report and couldn't comment because of company regulations. Huatai couldn't be reached for comment as of press time.
The decision of Chinese Internet companies to get delisted from the U.S. market reflects their intention of seeking higher valuations on the stock market in the Chinese mainland, Liu Dingding, an industry analyst with Beijing-based market consultancy Sootoo, told the Global Times Tuesday,
He noted that Qihoo's valuation may exceed 100 billion yuan ($15.42 billion) in the domestic market, far above the current value of $8 billion.
According to data from Thomson Reuters, at least 33 companies from the mainland have disclosed plans to go private and get delisted from the U.S. market as of mid-November this year.
The companies include dating service provider Jiayuan.com International, online video provider Youku Tudou and game developer Shanda Games.
Qihoo 360 wouldn't be the only U.S.-listed company to use a backdoor deal as part of this process. The NASDAQ-listed Shanda, which agreed to a buyout deal worth about $1.9 billion in November, is likely to get listed on the A-share market in a backdoor listing via Ningxia Zhongyin Cashmere Co, which is listed in Shenzhen, South China's Guangdong Province, according to media reports. Trading in Zhongyin has been suspended since August 2014.
The company said in a filing in mid-December that it had participated in Shanda's privatization and was considering how to get Shanda listed in the A-share market with other investors.
The backdoor deal is a quick way to get listed, but it will soon be the case that large Internet companies will prefer direct and independent listings given a pending new IPO system, which is expected to simplify the procedures, said analysts.
On Sunday, the Standing Committee of the National People's Congress approved a draft proposal for the new registration-based IPO system, effective in March 2016.
