US Firms Land Roles on Multibillion-Dollar Take-Private Deal of Chinese Classifieds Site
Firms including Wilson Sonsini and Paul Weiss are advising a buyer consortium that will take New York-listed 58.com private in a deal that values the company at $8.7 billion.
June 16, 2020 at 12:34 PM
4 minute read
The website of Chinese classified listings site 58.com. Photo: Shutterstock.com
A group of U.S. firms, including Skadden, Arps, Slate, Meagher & Flom, Weil, Gotshal & Manges and Kirkland & Ellis, are advising on a take-private deal of China's 58.com Inc. valued at $8.7 billion.
As part of the deal, an investor consortium backed by private equity firms Warburg Pincus, General Atlantic and Ocean Link, and 58.com chairman Yao Jinbo, will buy out independent shareholders of the New York Stock Exchange-listed company at $56 per American depositary shares, a nearly 20% premium to its closing price on the last trading day before receiving the take-private offer.
Beijing-based 58.com operates a popular classifieds site for listings of jobs, housing, delivery and other services that match local providers and customers. The company went public in 2013 in a $187 million initial public offering. The company first received the take-private offer in April, and the deal is expected to close in the second half of this year.
Skadden is acting for 58.com with a team led by Hong Kong partners Julie Gao and Shu Du, and Beijing partner Peter Huang. The U.S. firm has advised the Chinese company on several major transactions, including its 2013 IPO which Gao led. In 2015, she also led the firm's representation of 58.com on its $1.6 billion merger with longtime rival Ganji.com.
Han Kun Law Offices Beijing partners Dafei Chen and Tracy Zhou are advising the company on Chinese law. The firm also served as Chinese counsel to 58.com on the U.S. IPO and the Ganji merger.
Fenwick & West is advising a special committee of independent directors who recommended the offer to the company's board.
Wilson Sonsini Goodrich & Rosati, Paul, Weiss, Rifkind, Wharton & Garrison, Kirkland & Ellis and Weil Gotshal are serving as co-counsel to the buyer consortium. In addition, the four firms also are advising individual members of the consortium. Wilson Sonsini Hong Kong partner Weiheng Chen and Shanghai partner Jie Zhu are leading a team also advising Warburg Pincus. Paul Weiss is also acting for General Atlantic with New York partners Matthew Abbott and Neil Goldman and Beijing partner Judie Ng Shortell.
Kirkland, with a team led by Hong Kong partners Daniel Dusek, Xiaoxi Lin, Jacqueline Zheng and David Irvine, is also advising Ocean Link, a Hong Kong-based private equity firm. Weil Hong Kong partners Tim Gardner and Chris Welty are also representing Yao, 58.com's chair and chief executive.
Fangda Partners is Chinese counsel to the consortium with a team lead by corporate partners Leo Lou, Yiru Wang and Mengjie Wang, antitrust partners Michael Han and Caroline Huang and finance partner Stanley Chen.^
Linklaters Hong Kong partners Davide Mencacci and Frank Cui are advising Shanghai Pudong Development Bank Co. and other lenders on a $3.5 billion loan to the consortium.
The deal follows a $1.1 billion take-private offer agreed to by Bitauto, a Chinese used car website operator. An investor consortium led by Tencent Holdings Ltd. will take New York Stock Exchange-listed Bitauto private in an all-cash deal. Skadden's Gao and Huang, both advisers to the company on its 2010 IPO, are representing a special committee of independent directors on the deal. Latham & Watkins and Kirkland & Ellis are acting for the consortium. The Latham team is led by Hong Kong partners Frank Sun, Benjamin Su and Terris Tang.* The Kirkland team is led by Hong Kong partners Nicholas Norris, Daniel Dusek, Xiaoxi Lin, Carmen Lau, Justin Dolling and Jennifer Feng.
More U.S.-listed Chinese companies will likely seek privatization options as U.S. regulators tighten scrutiny. In June, U.S. Securities and Exchange Commission chairman Jay Clayton voiced support of the Holding Foreign Companies Accountable Act, a piece of legislation that has passed the Senate and is now before the House that would force companies to de-list from U.S. exchanges if they fail to allow U.S. inspections of their books for three years in a row. Chinese companies have traditionally declined to send audit reports to the Public Company Accounting Oversight Board.
*Updated 6/19: This story has been updated to include Latham's lead partners on the Bitauto deal.
^Updated 6/23: This story has been updated to include lead partners at Fangda on the 58.cm deal.
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