Consortium unveils plan to take Zhaopin private
17 Feb 2017
Australian recruitment advertising company Seek (ASX: SEK), majority owner of jobs site Zhaopin (NYSE: ZPIN) in China, wants to take Zhaopin private with a consortium of investors, including Seek, Hillhouse Capital Management, and FV Investment Holdings, an affiliate of FountainVest Partners.
Seek currently owns ordinary shares representing 74.6 percent of the voting power, and 61.3 percent of the share capital in Zhaopin.
Zhaopin claims to be the No. 1 career site in China, with more than 125 million registered users and about 37 million job postings last year. According to Zhaopin, it had more than 500,000 unique customers, including multinational corporations, small and medium-sized enterprises and state-owned entities.
In a statement today (here), Seek said the consortium would buy the outstanding shares for $18 U.S. cash per American depository share (ADS), or $9 U.S. cash per ordinary share. The purchase could be funded with available cash at Zhaopin, possibly by declaring dividends to holders of the ADS, or ordinary shares.
Thomson Reuters reported the consortium is in talks to buy the stake in Zhaopin of Australian billionaire casino boss James Packer. According to StraitsTimes (here), Packer holds two-thirds of the shares not already owned by Seek.
Should the consortium strike the deal, Packer’s investment exposure to China will reduce further. He has been cutting back his offshore investments – in China in particular – since the authorities there arrested 18 of his Crown Resorts casino staff in October last year, amid a gambling crackdown, wrote StraitsTimes.
Today’s announcement came more than a year after various investors first said they were considering to buy out the stake of Zhaopin that Seek did not own, and delist Zhaopin from the New York Stock Exchange. (See CIR 17.02, January 2016.) Zhaopin listed on the NYSE in June 2014.
In January, Zhaopin received a non-binding offer from a consortium (we assume the same one as above – editor) to acquire any (and all) of the shares not already owned by members of the consortium.
Zhaopin’s board then formed a special committee to review the proposal. The committee is made up of Andrew Peter Schloss, Alex Chit Ho, both independent directors with no links to any of the consortium members, and a contracted, independent financial advisor and legal counsel.
If the proposal is accepted, it’s expected that Seek will retain a similar controlling equity interest (61.3 percent) in the private company owning Zhaopin.
Seek said the directors’ committee has no deadline for evaluating the proposal, and promised to issue updates as appropriate.