Yucheng Technologies Ltd. (YTEC) said Monday that it has received a preliminary, non-binding offer from its chairman and chief executive officer Weidong Hong to take the company private for $3.80 per ordinary share in cash.
The offer price represents a 23 percent premium to the company's closing stock price on Friday of $3.08 per share.
Yucheng's board of directors has formed an independent committee of independent directors, composed of Yingjun Li, Zhengong Chang, and Tianqin Chen, and elected Yingjun Li as its chairman, to consider the offer. Hong currently beneficially owns about 16.1 percent of the company's ordinary shares.
China-based Yucheng is a provider of information technology software and solutions to state-owned commercial banks.
Last Tuesday, Yucheng reported net loss for the first quarter of $0.55 million or $0.03 per share, compared to net income of $27,584 or breakeven per share in the prior-year period. Net revenue for the quarter grew 44 percent to $16.53 million.
Yucheng noted at that time that increasing costs, notably increasing wages, more subcontracting to strategic partners, and research and development costs, caused gross margin to decline compared with last year. Looking ahead, the company expects this trend to continue in the second quarter and the rest of 2012.
YTEC closed Friday's regular session at $3.08, up $0.02 on a volume of 23,000 shares.
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