By Jiahui Huang
IMAX China Holding shares experienced significant volatility during morning trading as shareholders voted against a $124 million buyout proposal. This decision ensures that the shares will continue to be listed in Hong Kong.
At the beginning of trading on Wednesday, the Shanghai-based company’s shares plummeted by 10% but later recovered some of the losses by midmorning. As of now, the shares are 3.1% lower at 7.75 Hong Kong dollars (99 U.S. cents), which brings the year’s gains to 9.9%.
In July, IMAX Corp., the company’s parent based in Canada, made an offer to purchase all the shares it did not already own in its Chinese unit for HK$10 each.
However, the shareholders of the Chinese unit voted against the offer on Tuesday, with more than 10% of votes opposing the deal. This surpassed the required threshold to defeat a privatization bid. Approximately 70% of the vote showed support for the bid.
Letko, Brosseau & Associates, a Canadian investment group that controls about 1.7% of IMAX China’s outstanding shares, previously stated that the bid undervalued the company significantly and appeared “opportunistic.” This criticism was especially relevant as the company was recovering from the impact of the pandemic.
