Bison Capital had offered to acquire NQ Mobile for $490 million last year
NQ Mobile shares jumped 5.13% to $3.69 in early trading Monday following reports that Bison Capital may still be interested in acquiring NQ Mobile. Sources familiar with the talks told Charles Gross of Benzinga that one of Bison Capital’s partners was still trying to strike a deal with the Beijing-based mobile security company. Gross said sources did not provide any further details.
NQ Mobile stock has been highly volatile
On July 30, 2014, Bison Capital had offered to acquire NQ Mobile for $490 million or $9.80 per share, a 42% premium to NQ’s stock price on July 29, 2014. But the company’s board rejected that offer on October 28 last year. NQ said at the time that it had the opportunity to explore many strategic options, without revealing what those options might be. ValueWalk is very skeptical of this supposed bid as we were when Bison first made the offer, which we had questioned whether it was genuine or not.
The stock has been on a roller coaster since 2013 when Carson Block of Muddy Waters said the stock was not worth more than $1. Muddy Waters had accused NQ Mobile of fraudulent accounting practices. Block claimed that at least 72% of the company’s 2012 China security revenues were “fictitious.” He said the company had “data tampering” problems.
Bison Capital owns a stake in Airmedia Group
In December 2014, NQ Mobile co-chairman Dr. Henry Yu Lin resigned. Though the company has said that it did not find any evidence of fraud during internal investigations, investors remain skeptical. In May 2014, NQ Mobile agreed to sell 5.88% of its gaming unit FL Mobile to Bison Mobile Ltd and other unnamed investors for $15 million. Bison Mobile is a division of Bison Capital. However, buyers had the right to sell the FL Mobile stake back if the gaming firm didn’t go public within 12 months after the sale.
Bison Capital founder Xu Peixin is also a partner of venture fund New Enterprise Associates. Bison has invested in the U.S.-listed digital media advertiser Airmedia Group.
NQ Mobile shares were up 3.42% to $3.63 at 10:32 AM EST on Monday.