Weibo denies report of plans to take company private

[BEIJING] A Weibo representative denied a report that the chairman of the Chinese Twitter-like service and a state investor are in talks to take the company private.

The shares gave up much of the gains on an earlier report from Reuters that said the deal could value Weibo at US$20 billion and ease an exit for Weibo's major shareholder, Alibaba Group Holding. Reuters cited people familiar with the matter and said it wasn't clear which Chinese state firm was in on the deal.

The consortium would offer about US$90 to US$100 per share to take Weibo private, according to Reuters, representing a premium of as much as double the stock's US$50 average price over the past month.

"The speculation is not true," a representative for Weibo told Bloomberg, declining to elaborate. Weibo also issued a statement saying that Weibo Chairman Charles Chao informed the company that the Reuters story is "untrue and he has had no discussion with anyone regarding privatisation of the company."

Weibo shares jumped more than 40 per cent in early trading in New York before the company's denial. They were trading up 10 per cent to US$59.90 at 9.35 am in New York. A representative for Alibaba couldn't immediately be reached for comment.

Mr Chao's holding company New Wave held a 45 per cent stake in Weibo as of February valued at about US$5.5 billion based on Friday's closing stock price. Alibaba held a 30 per cent stake, according to the company's 2020 annual report, valued at S$3.7 billion.

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Internet pioneer Sina launched Weibo in 2009 and quickly amassed millions of registered users posting messages of 140 characters or less. It was listed on the Nasdaq in a 2014 initial public offering. While Twitter is blocked in China, Weibo and other social media in the country are subject to state censorship.

BLOOMBERG