(Yicai Global) Jan. 4 -- Qihoo 360 Technology Co.'s planned backdoor listing vehicle saw its shares close at an all-time high yesterday as optimism spread among investors after Chinese regulators approved the cyber security firm's reverse merger late last month.
SJEC Corp.'s [SHA:601313] shares rose to CNY55.63 (USD8.56) each, valuing the elevator maker at CNY376.3 billion (USD57.9 billion). That's a bigger market cap than rolling stock producer CRRC Corp., real estate developer China Vanke Co. and home electronics maker Midea Group Co.
When SJEC announced details of the merger last month, it also said Qihoo had received a demand letter from the lawyer of a game developer claiming USD341 million in compensation for an alleged failure to perform its contract obligations in a business venture. A potential lawsuit concerned investors at the time as the securities regulator had not yet given the green light.
Qihoo ended a five-year listing on the New York Stock Exchange in July 2016. The Beijing-based company chose to repatriate because it provides network security protection and solutions to many sectors and was unable to obtain the necessary qualifications for many businesses as a foreign firm, Zhou said shortly after its New York departure. The firm said last November that it would inject its assets into SJEC.
In a backdoor listing, or reverse merger as they are also known, a privately held company buys a publicly held one to side step the lengthier regulatory process involved in an initial public offering.
SJEC's rally means the 1.58 billion shares Qihoo Chairman Zhou Hongyi is set to directly or indirectly hold would be valued at over CNY88 billion, which is more than the net worth of JD.Com Inc. Chief Executive Richard Liu and Amer International Group founder Wang Wenyin, the 'Prince of Copper.'