Tom Online (TOMO) has confirmed with local media that it will be privatized and returned to the control of its parent company Tom Group.
Both Tom Online and Tom Group have halted their respective transactions on the Hong Kong Stock Exchange and Nasdaq yesterday.
Tom Group currently holds 65.73% of the stock of Tom Online. Based on the stock price of Tom Online in Hong Kong, Tom Group needs to pay HK$1.65 billion to purchase the circulating stock of Tom Online and pay CNY4 billion to CNY5 billion to take Tom Online private.
Analysts say although Tom Group has made preparations for privatizing Tom Online, it may abandon the move with the increase of Tom Online's cost.
This move might also be an indicator of trouble ahead for other listed Chinese Internet stocks.