What happened
After several tries and near-misses, 51job (JOBS) is finally being bought out. In reaction, relieved investors traded the China-based job listings company's American depositary shares (ADSes) up by 10% on Tuesday, lifting it close to the total purchase price in the deal.
So what
The buyer is Garnet Faith Limited, a consortium of investors that includes current 51job CEO Rick Yan and Japan-based Recruit Holdings, the company's largest shareholder. The consortium agreed to pay $61 per each 51job ADS. Tuesday's reaction by the stock market sent the ADSes to a close of $57 apiece.
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The consortium plans to take the company private. Technically the deal will take the form of a merger, with Garnet Faith being subsumed into 51job. The merged company will keep the 51job name.
That $61 per ADS is a revised offer, representing an increase from the previous $57.25 bid. In turn, the latter was nearly 30% below Garnet's original offer.
51job said the merger is expected to close in the first half of this year. It is subject to approval by 51job shareholders, who must ratify it with at least two-thirds of their total voting power.
Now what
As often happens with go-private transactions involving high-ranking insiders, a yes vote on the Garnet Faith merger seems almost assured. Yan and "entities through which Mr. Yan beneficially owns shares," Recruit Holdings, and allies hold nearly 55% combined of the voting rights of the company. Plus, at the generous premium to the ADS price, their fellow investors should have no problem agreeing to the sale.
