CEO of China New Borun Withdraws Buyout Bid; Stock Drops 7%
The stock of China New Borun Corp. (NYSE: BORN) dropped more than 7 percent intraday Thursday after the company announced that its chairman and chief executive officer, Jinmiao Wang, has withdrawn his buyout offer.
China New Borun, a Beijing-based producer of corn-based alcohol, said it has dissolved the committee for the review of the joint proposal from Wang and a majority shareholder, King River Holding Ltd., received January 10.
In response, the shares of the company lost 9 cents in trading today to $1.13 per American depositary share.
Under the proposal, Wang and King River, a British Virgin Island company owned by CEO Wang's mother, would have acquired all of the outstanding ordinary shares of China New Borun for $1.67 in cash per ordinary share.
The company did not specify the reason as to the withdrawal of Wang's offer.
China New Borun has been publicly traded in New York since 2010, the year when it saw its shares hit its ceiling of $20.50 per share, but then began a decline that never rebounded. The company has been trading just above $1 per share since 2014.
China New Borun supplies ingredients that are blended into various corn-based liquors called baijiu, a popular alcoholic beverage in China. Baijiu, which has an alcohol content as high as 68 percent, is generally associated with a higher standard of living, and consumption has been growing dramatically over the years.
The stock of China New Borun fell more than 7 percent intraday to $1.13 per share after CEO of the company withdrew his buyout proposal.
(Source: Thomson Reuters Eikon)