Speculation mounts regarding Huobi IPO
Chinese cryptocurrency trading platform Huobi is believed to have bought a a majority stake in Hong Kong-listed electronics manufacturer Pantronics, stirring speculation that Huobi is planning an initial public offering (IPO) through a reverse takeover.
According to shareholding disclosures filed by Pantronics last week, the company has transferred more than 221 million of its ordinary shares to several Huobi subsidiaries. The agreed price per share was HK$2.72 ($0.35), valuing the deal at around $77m.
Following the transaction, Pantronics temporarily suspended trading of its shares on the Hong Kong Stock Exchange due to a “possible offer to be made under Rule 26 of the Hong Kong Codes on Takeovers and Mergers”.
If approved by Hong Kong, the deal will make Huobi chairman Li Lin the largest Pantronics shareholder, controlling 73.73% of the firm. As Cryptovest reports, this would allow the crypto major to take over the public company and then enter the secondary financial market, a procedure called a reverse takeover, or backdoor listing.
The response so far from Li is that the IPO is “just a rumor”. He added that since the cryptocurrency exchange business is currently not fully compliant on a global scale, a backdoor listing would be very difficult to do.