Wanda Sports, a subsidiary of Wanda Group, will be delisted from the US.
On the evening of Oct. 23, Wanda Sports issued an announcement saying that the board of directors agreed to delist the company from Nasdaq and the company will be delisted from the Nasdaq exchange on Jan. 29 next year. And Wanda Sports has been listed on NASDAQ for less than a year and a half.
According to mainland and Hong Kong media sources, an announcement from Wanda Sports, a subsidiary of Wanda Group, said Wanda Sports Media (Hong Kong) Holdings Limited, a wholly-owned subsidiary of Dalian Wanda Group, will acquire all Class A shares of Wanda Sports at a price of $2.55/ADS for the company’s privatization.
Wanda Sports’ share price in the U.S. was last quoted at $2.4998, up 11.1%.
Prior to that, on September 30, Wanda Sports announced that its board of directors received a preliminary non-binding proposal from Wanda Sports Media (HK) Holdings Limited to acquire all outstanding Class A ordinary shares of Wanda Sports, including American Depositary Shares (ADSs) representing Class A ordinary shares, at a purchase price of $2.50 per ADS in cash or $1.67 per Class A ordinary shares for $1.67 per share.
Wanda Sports Limited (Wanda Sports) was founded on December 22, 2015, registered in Hong Kong in November 2018 and listed on NASDAQ in the United States on July 26, 2019. However, on the eve of the listing, the company’s share price dropped again and again, eventually listing at an offering price of $8 per share, below the offering price range of $9 to $11 per share, and falling below the offering price at the opening, down 35.5% on the first day of listing.
And in the subsequent time, Wanda Sports’ share price has been low, coupled with Wanda Sports’ expansion with high leverage, accumulating huge debts.
Until 2019, Wanda Sports’ gearing ratio was over 100%. It was not until 2019 that its debt ratio dropped to 87.3%, but it is still at a high level.
Wanda Sports’ third-quarter earnings data show that the company’s revenue has declined for three consecutive quarters. Total revenue from continuing operations for the third quarter was €91.237 million, down 42% year-over-year. The three main businesses that are sources of revenue for Wanda Sports: mass participation sports, spectator sports and digital media production and solutions (DPSS) also fell 87%, 36% and 20%, respectively.
Recently, Chinese stocks listed in the US have been delisted from the US.
News from Nikkei News on Dec. 22 indicates that New Wave MMXV Limited, a company controlled by SINA Chairman and CEO Cao Guowei, has offered SINA shareholders $43.30 per share in cash to take SINA private and off the market.
In addition, several Chinese stocks, including Chinese information classified platform 58 Tongcheng and search engine Sogou, have received or accepted offers from investors to take their companies private this year, the highest number since 2015, in the face of increased regulation of Chinese stocks in the U.S. Jingdong and NetEase both went public in Hong Kong 2 times this year. Currently, 58 Tongcheng shareholders have favored privatization off the market, and the privatization deal is expected to be completed by the end of this year.
Some commentators said that the U.S. has passed the Foreign Company Accountability Act, which will prohibit foreign companies from listing and trading in the U.S. if they fail to undergo audits by the U.S. Public Company Accounting Oversight Board (PCAOB) for 3 consecutive years. After the passage of the bill in the U.S., Chinese stocks are likely to be delisted from the U.S., and the overseas financing channels for mainland enterprises through the stock market will be closed.
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