ADRs of 7 Days Group Holdings Ltd. jumped to a four-month high in U.S. trading after the second-biggest budget hotel owner in China said it received a buyout proposal to take the company private.
The company’s American depositary receipts surged 12 percent in its fourth day of gains to $11.79 by 2:35 p.m. in New York, the highest level since May 9. Each ADR represents three ordinary shares.
The board of Guangzhou-based 7 Days received the “non- binding” proposal from a group of private-equity firms led by the Carlyle Group and Sequoia Capital, and existing shareholders including the company’s co-chairmen Boquan He and Nanyan Zheng, it said in a statement today. The group plans to purchase all outstanding shares with cash at $4.23 each, or $12.7 per ADR.
The company’s board is expected to form a special committee to consider the proposal with the assistance of a financial adviser and legal counsel, according to the statement.
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