THE US$9.3 billion buyout of Qihoo 360 Technology Co., owner of China’s second-biggest search engine, is the latest sign that Chinese mainland companies are renewing their interest in delisting from U.S. exchanges to sell equity locally at a higher valuation.

    The US$77 per American depositary share offer for Qihoo from an investor group including Ping An Insurance (Group) Co. and Sequoia Capital China follows a non-binding agreement initially proposed six months ago. The deal is part of a string of U.S.-listed Chinese companies that have announced privatization offers worth a record US$37 billion this year as investors and executives seek to shift listings to the mainland.

    While the flow of takeover bids has slowed since June as Chinese stocks fell in a rout that erased as much as US$5 trillion in equity value, making a local listing less attractive, they are now coming back after markets stabilized. The buyouts have primarily targeted the U.S. traded stock because they’re cheap compared with their Chinese-traded peers.

    “People were worried that the Qihoo deal might fall apart because of its gigantic size,” said Tan Chiheng, an analyst at Granite Point Capital Inc. “But since a deal as big as Qihoo didn’t have a problem getting financed, more Chinese firms may follow suit.”

    The Qihoo deal is offering investors a premium of 16.6 percent to the company’s closing price June 16 with the deal expected to close in the first half of 2016, according to a statement Friday. Shares of Qihoo rose 1.7 percent to US$73 in New York after the announcement.

    The offer, made by an investor group that also includes chief executive officer Zhou Hongyi as well as Citic Guoan Golden Brick Capital and Huasheng Capital, is at the same price as the June proposal.

    While 38 U.S.-listed Chinese companies have received offers this year to go private, only five have completed the process. Investors are looking for ways to accelerate the delistings to take advantage of the improving market environment after the Shanghai Composite Index jumped 22 percent from a bottom in August. Homeinns Hotel Group and dating site Jiayuan.com International Ltd. this month both accepted acquisition offers from China-listed firms, a move that will quicken the pace by which they could move to local trading.

    Homeinns has agreed to be bought by Shanghai-listed hotel operator BTG Hotels Group based on an offer that’s almost 10 percent higher than the original buyout price in June. Baihe Network Co., listed in China’s over-the-counter market, will acquire the country’s biggest online matchmaking site Jiayuan.com through its subsidiaries, also at a premium to the initial deal.

    With both offers being made by Chinese companies that are already traded locally, it means that once the buyouts are completed, Homeinns and Jiayuan will immediately become part of publicly listed entities in China. Such an approach gives companies a faster route to the Chinese stock market than going through the initial public offering process, according to Henry Guo, an analyst at Summit Research Partners LLC.

    “This is a more innovative way we are seeing for Chinese companies to return home,” Guo said. “The process will be much easier through current listed companies. We’ll see more of that type happening in future.”

    Jiayuan has gained 9.6 percent this month, while Homeinns jumped 11 percent.

    “This is very encouraging for ‘go privates,’ which now have another route to an A-share listing along with a direct IPO or a reverse merger,” said Ryan Roberts, a Hong Kong-based analyst at MCM Partners.

    As firms seek to return home, IPOs by Chinese firms in the United States have plunged. Only 14 firms have debuted on U.S. exchanges this year with a total value of US$666 million. (SD-Agencies)