For So-Young International Inc. (SY.US) investors, a management-led buyout offer floated nearly a year ago must feel like a distant dream by now. Completion of the deal at the proposed price looked increasingly unlikely with each passing month, as shares of the popular cosmetic surgery app plunged in an increasingly tough landscape for its products and services.
So it wasn’t a huge surprise when the company said last Friday a preliminary buyout offer made by a group led by co-founder and CEO Jin Xing last November was officially off the table. Back then, the group offered to purchase all of the company’s outstanding shares they didn’t already own for $5.30 per American depository share (ADS), in a deal that would take the company private. The offer price represented a premium of about 23% to So-Young’s last share price at the time.
Market reaction back then suggested investors were skeptical the deal would go through. So-Young’s stock did pop on the day the buyout plan was announced, but closed well below the offer price at $4.82. And rather than close the gap in the months that followed, So-Young shares have actually been in a free fall, similar to ones seen for many of their U.S.-listed Chinese peers.