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Why China Ming Yang Wind Power Group Ltd.'s Shares Popped Today

By Travis Hoium – Feb 3, 2016 at 3:35PM

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A buyout offer has paid off nicely for investors today.

What: Shares of China Ming Yang Wind Power Group Ltd. (NYSE: MY) jumped 15% after getting an offer to go private.

So what: A consortium of investors including Chairman and CEO Mr. Chuanwei Zhang has offered to take the company private for $408 million. The all-cash offer is for $2.51 per American depositary share and is expected to close in the first half of the year.  

Now what: There's still a risk that a buyout like this will fall through, but unlike some "go private" offers in China recently, this one appears to have financing lined up with lenders. And considering the company's profitability recently, I think the buyout is likely. For investors who own shares today, taking some chips off the table wouldn't be a bad idea in case the buyout isn't completed, but with about 10% further upside potential, I wouldn't sell out completely.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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