HONG KONG -- Sina, the Chinese company behind the popular Twitter-like microblog Weibo, said on Monday that its board accepted an updated go-private offer by Chairman and CEO Charles Chao that values the company at $2.59 billion, slightly higher than previously proposed.
The new offer will give each shareholder $43.30 in cash for each ordinary share they own, compared with the $41 that Chao initially offered in July. The board's decision was made after a unanimous recommendation by a committee formed earlier to evaluate the deal, Beijing-based Sina said.
The endorsement by the board pushes the 22-year-old company a step closer to delisting itself from the Nasdaq, where it has traded since 2000, joining a growing group of Chinese technology companies departing American exchanges amid continuing tensions between the U.S. and China.
To get the deal through, however, Chao still needs to secure approval from shareholders representing at least two-thirds of the voting power. But that is expected to be achievable, as Chao alone controls 61% of the voting power and will vote in favor of the deal, Sina said in a statement.
The acquisition will be funded by loans from China Minsheng Bank as well as savings from Chao, it said. Morgan Stanley Asia is serving as financial adviser.
Sina's advertising income, its major source of revenue, fell about 10% to $392.2 million in the second quarter from the same period last year, it said on Monday. The decline, however, was milder compared with a 20% drop in the first quarter.
The company blamed weaker demand from such industries as entertainment and tourism due to the coronavirus pandemic, but it noted that demand from gaming and online education companies more than doubled for the period.
A company executive said in a conference call on Monday that it will add resources for developing video-based advertising by bringing in more popular video-content creators to its microblog platform.
More than 350 companies of Chinese origin have listed in the U.S. since 1993, according to Citigroup, as they sought to tap the depth and liquidity that the Nasdaq and the New York Stock Exchange offered.
However, as relations between Beijing and Washington soured over the past few years, Chinese companies have reversed course and are either pursuing secondary listings in Hong Kong or delisting from U.S. exchanges.
So far this year, 14 Chinese companies listed on American exchanges, including online classified company 58.com, have agreed or received offers to be taken private in deals worth $22.9 billion, the most since 2015 when 24 Chinese companies delisted from U.S. exchanges in deals valued at $27.6 billion, according to data compiled by Dealogic.
Tencent Holdings in July offered to take private search-engine company Sogou in a $2.1 billion deal.