By Angela Chen and Carlos Tejada
A Chinese company once touted as the Facebook of China has
received a management buyout offer valuing the social-networking
firm at about $1.4 billion.
Beijing-based Renren Inc. was one of a number of Chinese
social-media companies that sprang up a decade ago as increasingly
affluent China turned to the Internet. But it was eclipsed by
rivals such as Weibo Corp. and the social-networking services owned
by Tencent Holdings Ltd., and has more recently invested in online
video and mobile services like games.
Chairman and Chief Executive Joseph Chen and Chief Operating
Officer James Jian Liu proposed to acquire all outstanding shares
they don't already own for $4.20 per American depositary share, or
$1.40 per ordinary share. The proposal is nonbinding, the company
said.
Together, Mr. Chen and Mr. Liu own about 32% of the company and
have 49% voting power, the company said. They plan to fund the
proposed transaction with a mix of debt and equity capital. The
board will form a committee to consider the proposal.
Based on 1.02 billion diluted shares as of March 31, the offer
values Renren at about $1.4 billion.
Renren--which means "everybody" in Chinese--offered a
social-networking service similar to Facebook Inc. and was helped
when China blocked the U.S. service on the mainland. Renren raised
more than $740 million in its New York initial public offering four
years ago that saw its ADSes shoot well above their $14 offering
price.
But its main service has struggled to achieve profitability. In
the first quarter Renren reported a loss of $27.6 million. Renren
in recent years has sold off noncore businesses and looked to
diversify into area like mobile and games.
Other Chinese Internet companies have turned their focus to
mobile to capture Chinese users who increasingly tap the Internet
through smartphones and tablets.
Mr. Chen, Renren's founder, is known in China for his funding of
startups.
One recent investment was in FiscalNote, a startup that tries to
forecast U.S. legislation.
Write to Angela Chen at angela.chen@dowjones.com
Access Investor Kit for Tencent Holdings Ltd.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=KYG875721634
Access Investor Kit for Facebook, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US30303M1027
Access Investor Kit for Tencent Holdings Ltd.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US88032Q1094
Subscribe to WSJ: http://online.wsj.com?mod=djnwires