Wins Deal Delayed as Freeman FinTech Says It Needs More Time
(Bloomberg) -- Freeman FinTech Corp., the Hong Kong-based financial-services company that's planning to buy a majority stake in Chinese loan guarantor Wins Finance Holdings Inc., said it needs more time to provide shareholders with details about the deal.
The firm now expects to release more information on or before April 30, it said in a statement Friday, a day after Bloomberg News reported on the mysterious surge in Wins's shares. That's a month later than it previously expected. Wins has said that the acquisition is still being evaluated by the Hong Kong Stock Exchange.
Wins's majority shareholder, Wang Hong, signed the deal in December, agreeing to sell his 67 percent stake for $19.35 a share, a 79 percent discount to where the company was trading the day before he reached the agreement. Those shares were valued at more than $3 billion on Thursday after the stock dropped 20 percent to $224.41 in New York following the Bloomberg report.
The shares had soared as much as 4,555 percent since debuting on Nasdaq in 2015. The firm's market value surpassed $9 billion in February, about four times as much as LendingClub Corp., an online lender with 50 times the revenue. Wins said in a release that it had no idea what drove the surge in its stock, which boasts the best performance in the Nasdaq Composite Index over the past 12 months.
Ten former Freeman FinTech directors face possible sanctions by the local regulator over a failed 2011 deal that cost the firm HK$76.8 million ($9.9 million). Chairman Zhang Yongdong, who was censured by China's market regulator in 2015 for allegedly manipulating shares of a different company, resigned from his role at Freeman in January, after the Hong Kong Stock Exchange said he was unfit to serve as a director. Zhang now holds the title of honorary chairman.
To contact the reporter on this story: Lily Katz in New York at lkatz31@bloomberg.net.
To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net, Steven Crabill, Steve Dickson
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