Southern China’s Changsha-based ophthalmology medical institution, Aier Eye Hospital Group Co., Ltd. announced that it made an investment of USD 30.3 million in Chinese security software giant Qihoo 360 on Wednesday.
According to the announcement, the investment was made by Aier Eye Hospital’s wholly owned subsidiary Shannanzhilian Medical Information Technology Co., Ltd. The company will hold an 11.44% stake in Qihoo 360, second only to Zhou Hongyi, Chairman of Qihoo 360.
According to Aier Eye, the investment is expected to achieve higher capital gains and enhance the profitability of the company, which corresponds with the interests of all shareholders.
As China’s biggest Internet security company and second-largest search engine provider, Qihoo 360 entered into a definitive privatization bid on December 18, 2015, with a consortium of investors headed by Zhou Hongyi to be acquired for $77.00 in cash per American Depositary Share (ADS), valuing the entire company at approximately $9.3 billion. The merger agreement received shareholder-approval on March 30. The transaction is still subject to “the satisfaction or waiver of the conditions set forth in the merger agreement”.
According to an internal letter from Zhou, privatization is a strategic choice based on the current global and China’s capital market environment. The current market capitalization of Qihoo 360 is not equivalent to the real value of the company and privatization is the inevitable way to maximize the company’s market capitalization.
In addition to Aier Eye Hospital, the main shareholders of Qihoo 360 include CITIC Guoan Group, Sequoia Capital, Golden Brick Capital, Sunshine Insurance, Ping An Insurance and Taikang Life.
(Top photo from http://www.58pic.com.)