51job gains after agreeing to $61/share takeout from buyout group (update)

Mar. 01, 2022 9:05 AM ET51job, Inc. (JOBS)By: Joshua Fineman, SA News Editor7 Comments

business hand pushing acquisition button

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  • Update 9:05am: Adds 51job confirmation of deal, further details.
  • 51job (NASDAQ:JOBS) rose 12% in premarket trading after an investor group backed by DCP Capital and Ocean Link Partners agreed to purchase the Chinese online recruitment firm for $4.3B.
  • The consortium, which includes 51job CEO Rick Yan, agreed to buy 51job for about $61 per ADS, according to a statement. News of an agreement was earlier reported by Bloomberg.
  • A potential agreement comes after consortium proposed cutting the offer price to $57.25/share from $79.05 in January. The new $61 deal represents a 33% premium to the company's closing price of $45.83 on Jan. 11, before the $57.25 offer was announced.
  • Bloomberg originally reported in January that the buyout consortium was evaluating lowering its offer due to changes in the market environment since its offer was announced last summer. The consortium was said to be considering changes to the structure of its offer to help gain China regulatory approval.
  • The revised merger agreement extended the deal termination deadline from March 21 to August 3 and reduced the termination fee from $80M to $70M. The deal is expected to close during the first half of the year.
  • The consortium intends to fund the deal through a combination of cash contributions from certain members of the consortium pursuant to their respective equity commitment letters, equity contributions from certain shareholders of the company, proceeds from certain committed term loan facilities in an aggregate amount up to $1.875B.
  • The news comes after JOBS plunged almost 20% on Nov. 8 after the Chinese online recruitment firm said the buyer consortium formed to acquire the company has been in talks with regulators on recent regulatory changes that may impact the transaction.
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