Weibo shares surge as much as 48% on Tuesday following a Reuters report the Chinese blogging may be taken private.- Weibo's chairman and an unnamed state firm are working on forming a consortium for the potential deal.
- The consortium is considering a price premium of 80% to 100% to buy out Weibo.
US-listed shares of Weibo nearly doubled early Tuesday following a report the Chinese blogging site is in talks to go private in a deal that could set a value of at least $20 billion on the company.
Charles Chao, Weibo's chairman, and a state investor are discussing a potential deal, according to Reuters, citing two unnamed sources. New Wave, Chao's holding company, is working with an unidentified Shanghai-based state firm to create a consortium for the deal, Reuters said, citing the sources as well as a separate person.
The consortium is considering a buyout offer of $90-$100 per Weibo share, which would represent a premium of 80%-100% to the $50 average price of the shares over the past month.
Weibo shares jumped as much as 48% to $80.50 in premarket trade then moved to a gain of 20%. Volume appeared heavy with more than 5 million shares traded compared with an average daily volume of around 1.1 million shares.
New Wave is the largest shareholder in the company often referred to as
Weibo's shares began trading in the US in April 2014 and reached a peak above $142 in February 2018.