Huobi Completes $70 Million Acquisition of Public Company
Huobi is potentially looking to go public as it completes acquisition of a publicly traded company in Hong Kong.
Huobi, one of the leading cryptocurrency exchanges in the world by trade volume, has acquired Pantronics Holdings, a publicly traded company, after becoming its largest shareholder.
Pantronics is a publicly listed Hong Kong-based investment holding company, and this acquisition will likely make it possible for Huobi to get listed on the stock exchange. With the deal in place, Huobi Global Limited could have secured an opportunity for a previous unlikely listing on Hong Kong’s stock exchange.
This scenario is often referred to as a back-door listing. It is a situation where a private company gets listed on a secondary financial market through the acquisition of a majority of the shares in a public company.
PHL Chairman, Simon Nai-cheng Hsu earlier in the month asked the Hong Kong Stock Exchange to officially suspend trading of its shares on August 22, 2018. The reason behind that request was to allow the purchase process to conclude.
According to a statement released on August 29, Huobi Global completed the purchase in a deal that saw it acquire 199 million shares in Pantronics Holdings. The exchange closed the deal via Huobi Capital and Huobi Universal, two of its subsidiaries.
Huobi Group’s chairman Li Lin, who also controls the Capital and Universal subsidiaries, is now the largest individual shareholder in Pantronics. He now controls 66.26 percent of the company after completing the 199 million share purchase.
Details provided in the investment company’s statement show that price per share averaged HK$2.72 (or $0.35), bringing the total sale to approximately $70 million.
It comes across as a great piece of business for Huobi Global. However, the exchange group isn’t completely satisfied with the number of shares it managed to purchase.
On August 21, PHL filed a disclosure of interests that showed Huobi wanted to acquire about 73.73 percent of the investment company’s ordinary shares.
The crypto exchange giant had anticipated a purchase of about 215,576,000 shares in PHL, whose total cost as per that disclosure would have been $77 million.
However, that did not happen and PHL later amended its shareholding disclosures to accommodate the changes. Meanwhile, the acquired shares will continue trading on the Hong Kong stock exchange as long as 25 percent of the shares remain public.
Huobi Global is fully owned by Huobi Universal that controls 70 percent and Huobi Capital, which owns 30 percent.
Mr. Li Lin fully owns Huobi Capital, while notable shareholders in the Universal subsidiary are Techwealth (58.44 percent) and Sequoia Capital (23.32 percent). Li owns 89.09 percent of Techwealth Limited.
Other shareholders are Zhen Partners Fund I (7.46 percent), Vision Leader II Holdings (4.66 percent) and Sky Fort Investment Limited (1.42 percent).
One of the early signs that Huobi is set to reap big from the acquisition is the surge in the market price of Huobi token (HT) immediately after the news reached the investor community.
Although the surge can be attributed to the general uptrend in the market, indications are that the investor community has taken the news positively, a good signal towards future growth.
Patronics Holdings Limited (PHL) launched its operations in 1983 and primarily deals with the manufacture of electrical, electronics and power-related products. It has its offices in several countries, including China, Hong Kong, the U.S, the United Kingdom, and Japan.