Last year saw a resurgence in listed companies incorporated in the
High profile examples include the delisting of
By way of illustration, in the 12 months to
Why the surge in popularity?
Take-private transactions are cyclical in nature and tend to increase in number during economic downturns, where a variety of factors can cause the share price of a listed company to trade at a discount to its net asset value per share. 2020 is a case in point, as global stock markets saw increased volatility due to the Covid-19 pandemic and macroeconomic uncertainty.
Regulatory and compliance factors have also contributed to the renewed popularity of privatisations. Chinese entities with close ties to the state have privatised as a way to restructure their assets and improve internal efficiency by reducing compliance costs and centralising management.
Furthermore, tension between the US and Chinese governments has led some Chinese companies to consider de-listing from NASDAQ or the
The outlook for 2021
It is expected that these factors will continue in the short to medium term and, to date, 2021 has seen a continuation of the current wave of public-to-private transactions.
Ogier in
Footnotes
1 Note: See pages 69 of the HKEX Fact Book 2020.
2 Note: See page 63 of the HKEX Fact Book 2019.
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