Shares in 51job, Inc. (Nasdaq: JOBS) surged 15% in early trading Tuesday on its announcement of receiving an updated buyout proposal that now includes another private equity firm and the company’s chief executive officer.
Originally, DCP Capital solely made the bid on the human resources company for $79.05 per share. This time, DCP is collaborating with Ocean Link Partners Ltd., and 51job CEO, and co-founder Rick Yan to purchase all outstanding common shares of 51job at the same price, according to a statement posted by the company today. According to Reuters, the deal is valued at roughly $5.33 billion
Before trading commenced today, shares in 51job had dropped 23% since receiving the last buyout proposal in September.
The consortium plans on funding the deal with debt financing and equity capital.
In a “Non-Binding Proposal” letter to the company today, the consortium noted that it is prepared to “promptly negotiate and finalize Definitive Agreements providing for the Transaction.”
“We believe that the Transaction will provide superior value to the Company's shareholders. We understand that the Company's Board of Directors has established a special committee (the "Special Committee") comprised of independent directors to evaluate our Proposal and any alternative strategic options that the Company may pursue, the consortium said, as cited by 51job.
Further “We look forward to promptly engaging with the Special Committee and its advisors to discuss our Proposal.”
51job has been publicly traded in the U.S. since September 2004, when it raised $73.5 million through the sale of 5.25 million shares priced at $14 each. Currently, 51job trades fivefold its IPO price.
Operating for more than 20 years, 51job provides human resources services in China including outsourcing, training, professional assessment, campus recruitment, executive search, and compensation analysis, according to the company. With a call center in Wuhan, it has sales and service locations in more than 30 cities in China.
In the three months through December, 51job posted revenues that rose by 2% year-over-year to $178.3 million. Meanwhile, its profit in the quarter slipped to 342 million yuan ($52.4 million) compared with 249.5 million yuan in the same period of the preceding year.