Highpower Considers Buyout Proposal from Its Chairman; Stock Soars
The stock of Highpower soared as much as 22 percent intraday Monday after its founding chairman proposed to buy its outstanding shares at a 67 percent premium over Friday's close.
Highpower International Inc. (Nasdaq: HPJ) is considering a buyout offer from its chairman and chief executive officer, Dang Yu (George) Pan, for $4.80 per American depositary share, representing a premium of 67 percent from Friday's close.
In response to the company's announcement, its stock soared as high as 22 percent in early trading to $3.50 per share, then sank slightly to $3.30 per ADS in the afternoon Monday.
Highpower, which makes and recycles batteries and has offices in San Diego and Shenzhen, received the proposal letter from its founder and chairman on June 2.
The company's board said it planned to form a special committee of independent directors to consider Pan's proposal.
For the first three months, Highpower reported a net loss of $1.1 million, or a loss of 7 cents per share, in contrast to income of $2.5 million, or 17 cents per ADS, for the same period a year ago. Its sales in the first quarter grew 19 percent to $49.8 million, but gross profit fell 24 percent year-over-year to $7.6 million, attributed to high costs of raw material.
In February, Highpower acquired a 49 percent stake in Shenzhen V-power Innovative Technology Co. Ltd., which develops electronic vehicle battery systems and is planning to produce EV power modules, energy storage systems, and related products.
Pan founded Highpower in 2001 and listed his company on the Nasdaq in 2008. The company has a valuation of $53.4 million.
The shares of Highpower soared Monday after the company announced it received a buyout offer.
Its stock was trading at $3.30 per ADS, up nearly 15 percent in the afternoon.
(Source: Thomson Reuters Eikon)
(Correction: A previous version of this story misstated the ownership stake and name of the company in which Highpower invested in February. The company was Shenzhen V-power Innovative Technology Co. Ltd., not VPower Group International Holdings Ltd.)