Mark Ralston/AFP/File
- Weibo shares surge as much as 48% on Tuesday following a Reuters report the Chinese blogging may be taken private.
- Weibo's chairman and an unnamed state firm are working on forming a consortium for the potential deal.
- The consortium is considering a price premium of 80% to 100% to buy out Weibo.
- See more stories on Insider's business page.
US-listed shares of Weibo nearly doubled early Tuesday following a report the Chinese blogging site is in talks to go private in a deal that could set a value of at least $20 billion on the company.
Charles Chao, Weibo's chairman, and a state investor are discussing a potential deal, according to Reuters, citing two unnamed sources. New Wave, Chao's holding company, is working with an unidentified Shanghai-based state firm to create a consortium for the deal, Reuters said, citing the sources as well as a separate person.
The consortium is considering a buyout offer of $90-$100 per Weibo share, which would represent a premium of 80%-100% to the $50 average price of the shares over the past month.
Weibo shares jumped as much as 48% to $80.50 in premarket trade then moved to a gain of 20%. Volume appeared heavy with more than 5 million shares traded compared with an average daily volume of around 1.1 million shares.
New Wave is the largest shareholder in the company often referred to as China's Twitter. A buyout deal could see major shareholder Alibaba Group exiting from its stake in Weibo, said the report.
Weibo's shares began trading in the US in April 2014 and reached a peak above $142 in February 2018.
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