NASDAQ-LISTED Weibo Corp.’s chairman and a Shanghai-based State investor plan to take China’s answer to Twitter private, sources said, sending its shares as much as 50 percent higher Tuesday.

A deal could value Weibo at more than US$20 billion, facilitate shareholder Alibaba’s exit and see Weibo eventually relist in China to capitalize on higher valuations, the sources said.

Chairman Charles Chao’s holding company New Wave, Weibo’s top stakeholder, is teaming up with the Shanghai State company to form a consortium for the deal, three sources said, without disclosing the State firm’s identity.

The consortium is looking to offer about US$90-US$100 per share to take Weibo private, two of the sources said, representing a premium of 80-100 percent to the stock’s US$50 average price over the past month.

The group aims to finalize the deal this year, they said.

Weibo said in a statement that Chao and a State investor being in talks to take the company private was untrue. It cited Chao as saying he had had no discussion with anyone regarding delisting the company.

Weibo and Alibaba did not respond to requests for further comments. Chao did not respond to request for comment via Weibo parent company Sina.

Reuters reported in February that Weibo had hired banks to work on a Hong Kong secondary listing in the final half of 2021. Sources said this is no longer the plan.

Alibaba held 30 percent of Weibo as of February, the latter’s annual report showed, which was worth US$3.7 billion as of Friday’s close.

E-commerce giant Alibaba has invested in nearly 30 media and entertainment firms including Hong Kong’s flagship English-language newspaper South China Morning Post, Refinitiv data show.

Chao’s mooted deal would likely see it exit Weibo, the sources said.

U.S.-listed Chinese companies also face heightened scrutiny and potentially stricter audit requirements from U.S. regulators, amid political tensions between China and the United States.

A number of Chinese companies have already opted out of U.S. stock exchanges, by going private or returning to equity markets closer to home via second listings.

There were 16 announced delistings of U.S.-listed Chinese companies worth US$19 billion last year, Dealogic data showed, compared with just five such deals worth US$8 billion in 2019.

China’s State Council said Tuesday that it would step up supervision of firms listed offshore, citing the need to improve regulation of cross-border data flows and security.

Weibo has grown at a fast clip since its launch in 2009. More than 500 million Chinese use Weibo. Alibaba acquired an 18 percent stake in Weibo in 2013 via a US$586 million investment as its first big move into selling advertisement on China’s social networks. It has since raised its stake.

Weibo, which went public on the Nasdaq in 2014, makes most of its revenue from online advertising. (SD-Agencies)