Shares of Wanda Sports (WSG) jumped today, up by 11% as of 2:15 p.m. EST, after the company said it plans to delist from the Nasdaq but was launching a tender offer to buy out its American Depositary Shares (ADSs) that trade in the U.S. The offering price is at premium to current levels.
Wanda Sports, which operates a sports events, media, and marketing platform in China, is terminating its ADS deposit agreement and delisting its stock.
As part of that process, the media company is offering to purchase all Class A ordinary shares that the ADSs represent at a price of $1.70 per share, which translates to $2.55 per ADS. Every two ADSs represent three Class A shares. The tender offer price represents a 13% premium from yesterday's close of $2.25.
The tender offer commenced today and expires on Jan. 29, 2021 but can potentially be extended. Wanda Sports says that it hopes to reduce the number of Class A shareholders to less than 300, which would allow the company to delist from the exchange and suspend its financial reporting obligations.
The news comes amid broader scrutiny of Chinese companies that are listed on U.S. stock exchanges. President Trump recently signed a bill that would delist Chinese companies that fail to comply with American auditing requirements. Many other Chinese companies have been accused of fraud due to poor auditing and financial controls, which has led to calls for greater oversight.