A Chinese investment group led by Hua Capital has closed its $29.75/share ($1.9B), all-cash, acquisition of image sensor developer OmniVision (NASDAQ:OVTI). The deal's closing comes after U.S. regulators cleared it in October.
Trading in OmniVision shares has been halted, and will be officially suspended after today's close. OmniVision closed on Thursday at $29.38.
The Committee on Foreign Investment in the United States (CFIUS) has approved OmniVision's (OVTI +2.6%) planned $29.75/share sale to a Chinese investment group led by Hua Capital. OmniVision expects the deal to close in FQ4 (ends April '16).
The news comes a day after top rival Sony announced it's spinning off its image sensor unit (has been taking share from OmniVision) into a separate company. OmniVision is up 9% from last Friday's close, and now is just slightly less than a dollar below its buyout price.
With demand from Apple and Chinese mobile OEMs remaining strong, CEO Kaz Hirai Sony (SNE -3.1%) plans to invest €1.5B ($1.7B) in its image sensor ops in FY16 (ends March '16) - 5x what it invested in FY15.
The remarks come as Apple (NASDAQ:AAPL) gets set to launch the iPhone 6S/6S+, which are expected to feature much-improved cameras. The rear camera is rumored to support 12MP still photos, 4K video recording, and a faster burst mode; the front camera is reportedly being upgraded to 5MP.
Image sensors have been a strong point for Sony as it deals with weak smartphone and (PS4 excluded) home electronics sales. The company is believed to be taking share from OmniVision (OVTI +0.7%), which is expected by the Street to see its FY16 (ends April '16) sales drop 8.8% Y/Y.
At a special meeting, 97.1% of votes cast (represented 64.6% of outstanding shares) were voted in favor of approving OmniVision's (OVTI -0.3%) $29.75/share ($1.9B) deal to be acquired by a Chinese investor group led by Hua Capital. OmniVision expects the deal to close in calendar Q4 2015 or Q1 2016.
Amid ongoing concerns about U.S. regulatory approval, OmniVision currently trades 19% below the buyout price.
OmniVision (NASDAQ:OVTI) has sold off yet again, leaving shares even further below the $29.75/share buyout price it agreed to with a Chinese investor group in April. Fears U.S. regulators will reject the deal have weighed on shares, as have shareholder suits attempting to stop it on the grounds it undervalued OmniVision.
Yesterday morning, OmniVision announced it's rescheduling a special meeting to vote on the deal to July 23 to "provide additional time for court resolution" of a shareholder motion to prevent the company's sale under certain "corrective actions" are taken. Shareholders on record as of June 9 will be able to vote.
Today's drop comes as many U.S.-traded Chinese tech stocks nosedive. SA author Vince Martin argued today OmniVision has limited downside even if the buyout unravels.
An investor group featuring P-E firm Hua Capital and fellow Chinese investors CITIC Capital and Goldstone Investment is buying OmniVision (NASDAQ:OVTI) for a 12% premium to Wednesday's close. The $1.9B all-cash deal is expected to close in OmniVision's FQ3 or FQ4 (January and April 2016 quarters), provided shareholders and regulators sign off.
To get Taiwanese clearance, OmniVision will "divest certain of its interests in Taiwan," including JV interests. Bloomberg reported yesterday Hua was close to a deal to buy the image sensor vendor for ~$29/share.
Bloomberg reports OmniVision (NASDAQ:OVTI) is close to a deal to be acquired by Chinese P-E firm Hua Capital for $1.7B, or ~$29/share - a 9% premium to today's close. An announcement could happen as soon as tomorrow.
An investor group led by Hua made a $29/share non-binding offer last August. A rumor emerged last month that Hua might up its bid to $30/share.
A rumor that the Chinese consortium interested in acquiring OmniVision (OVTI +1.6%) might up its offer by $1/share to $30/share has helped the image sensor vendor move higher. Many other chip stocks are selling off for the second day in a row.
The consortium, led by Beijing P-E firm Hua Capital, made a $29/share non-binding buyout offer last August. OmniVision currently trades 10% below the offer price.