Momo Surges On Going-Private Offer By CEO-Led Group

(RTTNews) - Momo Inc (MOMO), a mobile social networking platform in China, on Tuesday said it received a non-binding going-private offer from a buyer group led by its CEO Yan Tang.

The buyer group has proposed to acquire all of the outstanding Class A stock of Momo not already owned by them for $18.90 in cash per American depositary share. The offer values Momo at more than $3 billion.

The $18.90 per share offer represents a premium of 20.5 percent to the closing price of Momo stock on June 22, the last trading day prior to the offer by the buyer group, Momo said.

Following the announcement, Momo shares surged about 11 percent in morning trade on the Nasdaq.

Apart from Yan Tang, the buyer group includes Matrix Partners China II Hong Kong Ltd, Sequoia Capital China Investment Management L.P. and Huatai Ruilian Fund Management Co Ltd.

The buyer group and their affiliates beneficially own an aggregate of 47.8 percent stake in Momo, which represent 84.1 percent of the aggregate voting power of the company.

Momo said its board has formed a special committee of two independent directors, who along with legal and financial advisors would evaluate the transaction.

Momo, co-founded by Chairman and CEO Yan Tang, enables users to establish and expand social relationships based on location and interests. Since its launch in August 2011, Momo has seen a steady increase in user base; its monthly active users reached 69.3 million in December 2014, doubling from the prior year.

Momo is the latest Chinese company to receive a buyout offer. Many Chinese CEOs, sensing the robust stock market in China, are vying to take their U.S.-traded companies private, with possibility of relisting at home.

Momo stock is trading at $17.40, up $1.71 or 10.91%, on the Nasdaq.