Chinese e-commerce company Jumei Youpin received a privatization offer from the buyer group represented by Chen Ou, Chairman, CEO and CFO of Jumei International on January 11. The group proposed to purchase the shares not held by the buyer group at a price of $20 per ADS (American Depository Shares), 15% higher than the closing price of the previous trading day. If completed, Jumei Youpin will delist from the NYSE (New York Stock Exchange) and become a private holding company owned by the buyer group.
This is not the first time Chen has attempted to take Jumei private. As early as February 18, 2016, Chen Ou made his first proposal to privatize the company with a buyback price of $7 per ADS, significantly lower than its IPO price of $22. Chen Ou withdrew his first privatization offer in November, 2019 after small and medium-sized shareholders jointly protested against the buyback. After that, Jumei Youpin has tried multiple times to raise its stock price through a share repurchase plan. The share price consequently experienced a short-term jump followed by a significant decline.
Known as a once popular cosmetics and luxury shopping platform, Jumei Youpin was listed on the NYSE in 2014 after benefitting from its founder Chen Ou’s online KOL marketing. Its share price rose from $27.25 at the opening to $39.45, with a peak market value of $5.78 billion. Jumei’s stock price has since fallen to $17.43, and has been blighted by counterfeit product scandals.