Qihoo 360, China’s largest cyber security company and a listee on the New York Stock Exchange, plans to complete its delisting from the NYSE at the end of May 2016. The company intends to return to China’s Mainboard at the end of 2016 via a backdoor listing, the Tech channel of Tencent News reported on Tuesday.
Qihoo 360 has finalized a USD 9.3 billion buyout offer from an investor group including Chinese Mainboard-listed company CITIC Guoan Group, Ping An Insurance Group and Sequoia Capital China. CITIC Guoan announced last Friday the company would invest USD 400 million in the deal, which accounts for 4.3% of the total cash consideration. CITIC Guoan Group is a Chinese company backed by Chinese state-owned investment company CITIC, with a business focus in information and telecommunications.
It is also reported that an investment group, which includes among its members Zhou Hongyi, the Chairman of Qihoo 360, plans to obtain a loan of USD 3.4 billion from one of China’s top four commercial banks the Industrial and Commercial Bank of China.
A document from Qihoo 360 securities underwriter Huatai United Securities indicates that the company plans on finishing the demolition of its Variable Interest Entity(VIE) structure at the end of the third quarter 2016 after delisting from the U.S. stock market at the end of March 2016. The document also shows that Qihoo 360 plans to complete its share transfer at the end of March 2017 after it goes public on the Mainboard in 2016.
According to 360’s buyout and re-listing plan, investor shares may be locked for one to three years depending on different routes of investment with possible debt attached. The long investment period and uncertainty of returns have drained some investors away from the deal.
Prior to Qihoo 360, quite a number of U.S.-listed Chinese companies have opted for privatization seeking a higher valuation in the Chinese market. According to Bloomberg, Qihoo 360’s USD 9.3 billion buyout has pushed the total number of delistings to a record $37 billion for 2015, a leap from the 2014 amount of USD 2.11 billion.
Qihoo was founded in 2005 by Zhou Hongyi and Qi Xiangdong in Beijing. The company offers three major products: a web browser, an app store and a search engine using cloud-based security technology. According to an Analysys International report in December, 360 Mobile ranks as the most used mobile security app in China with 116 million monthly active users.