CDH targets $1.1b buyout of US-listed Zhaopin

CDH and Shanghai Goliath Investment Management - an entity represented by Fabing Qu, who does not appear to be a sizeable existing shareholder in Zhaopin - is willing to pay $17.50 apiece for all outstanding American Depository Shares (ADS). The consortium said in a statement that the deal would be financed through a combination of equity and debt.

The offer price represents a 22% premium to the January 15 close, the trading day before the offer was submitted. Following the disclosure of the bid, Zhaopin shares reached a six-month high, closing at $15.74 on January 19, up nearly 10% for the day.

Founded in 1994, Zhaopin claims to be China's most popular online career platform, based on registered users and daily users for year ended September 2015. As of June 2015, the company had more than 100.8 million registered users, with 25.6 million job posted on its site by 418,423 employers over the previous 12 months.

Total revenue came to RMB1.29 billion in 2015, up from RMB1.01 billion the previous year, while net profit increased from RMB186.6 million to RMB252.6 million over the same period.

Seek built up a 79% stake in the business between 2006 and 2013, providing an exit for the likes of iD TechVentures, Legend Capital, Orchid Asia and Macquarie Capital. Following an IPO in June 2014 that raised $75.7 million - rising to $87 million after the overallotment option was exercised, Seek's holding had dropped to 62.8% by September of last year, although it had 75.1% of the voting power.

Apax Partners committed $14.1 million to Zhaopin through a private placement alongside the IPO.

A total of 30 take-private bids involving US-listed Chinese companies were announced in 2015, most of them falling in the first half of year, before a sizeable correction and ensuing volatility in the domestic markets. The rationale in many of these situations is that the target company can re-list in China at a superior valuation than it traded at in the US.

Of those 30 bids, 14 have so far resulted in definitive agreements. They include WuXi PharmaTech and Qihoo 360 Technology, which are valued at $3.3 billion and 9.3 billion, respectively.

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