China’s 7 Days Inn Soars on “Going-Private” Proposal09-27 11:12 Caijing
Shares of 7 Days Inn, a leading Chinese economy hotel chain, soared Thursday after the company announced that it had received a going-private proposal from certain shareholders.
7 Days said in a press release on Wednesday that its board of directors has received a proposal letter from certain existing shareholders to acquire all of the outstanding shares of the company not currently owned by the existing shareholders in a going private transaction for $4.2333 per ordinary share of the company and $12.70 per ADS.
Following the news, 7 Days Inn(NYSE:SVN) upped 13.06% Thursday to close at $11.95 after the shares rose for a fourth consecutive day.
The consortium members include famous Chinese investor He Boquan, founder of the company, Zheng Nanyan, and their respective affiliates, and joint sponsors, including the Carlyle Group and Sequoia Capital China and their respective affiliates.
The company said it expected that its board of directors will form a special committee consisting of independent directors to consider this proposal, but cautioned that there can be no assurance that any definitive offer will be made and that any agreement will be executed.
The Chinese leading and fast-growing economy hotel chain saw its revenue rise 27.3% year-on-year to RMB632.7 million (US$99.6 million) and net income up 23.3% year-on-year to RMB55.6 million(US$8.7 million), according to its second quarter financial results the company announced last month.
Lin Yuezhou, CEO and Director of 7 Day Inn said the company had begun to implement the strategy to increase emphasis towards managed hotel portfolio to maximize growth opportunities in China’s expanding economy hotel industry.
Other Chinese economy hotel chains listed on the American stock market
include China Lodging Group Ltd (HTHT)and Home Inns & Hotels Management
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