Homeinns Gets $32.81 A Share Acquisition Offer; Stock Up

(RTTNews) - Chinese economy hotel chain Homeinns Hotel Group (HMIN) on Friday said it has received a non-binding going-private proposal for $32.81 per share from a consortium that includes BTG Hotels.

The offer of $32.81 in cash per Homeinns American depositary share represents a premium of 20 percent to the average closing trading price of the stock during the past 20 trading days.

Following the announcement, Homeinns stock gained about 5 percent in morning trade on the Nasdaq.

Apart from BTG Hotels, the buyer group includes Poly Victory Investments Ltd; Ctrip.com International Ltd; Neil Nanpeng Shen, co-founder and co-chairman of Ctrip; James Jianzhang Liang, co-founder, chairman and CEO of Ctrip; and David Jian Sun, CEO of Homeinss.

The buyer group beneficially owns an aggregate of about 35 percent of Homeinns issued and outstanding shares.

In case a transaction materializes, the buyer group plans to fund the deal with a combination of debt and/or equity capital, and rollover equity in the company.

Meanwhile, Homeinns said it has formed a special committee comprised of three independent, disinterested directors, who along with legal and financial advisors would evaluate the proposal.

The company said there can be no assurance that any definitive offer will be made and that any agreement will be executed.

Homeinns is a budget hotel chain in China. In May, the company said it slipped to a loss in the first quarter, mainly hurt by the economic slowdown and the late timing of Chinese New Year that put pressure on revenue per available room.

At that time, Homeinns said that while it does not see immediate signs of a market rebound, it remains confident of long-term growth.

Homeinns is trading at $31.59, up $1.42 or 4.71%.