JA Solar forms committee to consider takeover bid

Following the news on June 8 that JA Solar chairman and CEO, Baofang Jin offered to buy out the solar PV module manufacturer for around $489 million, JA Solar’s board of directors has formed a special committee to consider the proposal.

The committee is comprised of "independent and disinterested" directors, Shaohua Jia (committee chairman) and Yuwen Zhao. "The Special Committee intends to engage a legal counsel and an independent financial advisor for assistance in its work," said JA Solar in a statement released.

Baofang Jin, together with the Jinglong Group Co., Ltd, of which Jin is the sole director, offered to buy out JA Solar in a preliminary non-binding proposal letter last week. Jin currently owns around 15.6% of JA Solar. He offered to pay $9.69 per American Depositary or $1.938 per ordinary share in cash. On the back of the SEC filing on June 5, JA Solar’s shares increased 12%.

Going private to go public

According to domestic online news sources in China, the plan to take JA Solar private is very likely a step towards taking the company public on China’s domestic stock exchanges, either in Shanghai or Shenzhen.

The news sources continued by saying that many industry observers believe the listed PV companies on the Nasdaq stock market in the U.S. are undervalued. For instance, the three major listed Chinese PV companies on Nasdaq – Canadian Solar, Trina Solar and JA Solar – had 2014 sales totaling $2.96 billion, $2.29 billion and $1.82 billion, respectively; yet their market values were $1.83 billion, $919 million and $458 million, respectively.

Meanwhile, in China, there are other listed PV companies, like Eging PV, for example, with a market value of $2.5 billion, but sales of $524 million.

It has been suggested that an increasing number of Chinese companies currently listed on the U.S. stock exchange, will follow suit and try to go public on the Chinese stock market.

Yesterday, it was reported that the Shanghai Stock Exchange had a total market cap of $5.9 trillion, while the Shenzhen Stock Exchange topped $4.4 trillion.