360 plans to liquidate the equity of Openg browser

time:2022-12-09 19:13:42source:chakarski.com author:Garbage
360 plans to liquidate the equity of Openg browser

On the evening of September 23, 360 (601360) issued an announcement that the company’s board of directors reviewed and approved the sale of its shares in the US-listed company Opera Limited (hereinafter referred to as “Opera Browser”). The total transaction price was $129 million. 360 participated in the acquisition of Openg Browser for US$158 million in 2016, aiming to create business synergy between the two parties in Internet business through cooperation at the level of equity relationship. However, the two have gradually drifted apart in terms of business strategy. After the transaction is completed, 360 will no longer hold the equity of Oppen Browser. Withdrawal from investment in Opera Browser According to the announcement, Qifei, a wholly-owned subsidiary of 360, intends to sell its 46.75 million shares of Opera Browser (about 20.30% of the total shares of Opera Browser) at USD 5.50/ADS (1ADS= The price of 2 shares) is repurchased by Openg Browser, and the total transaction price is 129 million US dollars, which is equivalent to 899 million yuan according to the exchange rate of the People's Bank of China on September 23, 2022. Founded in 1995 and headquartered in Norway, Oppen Browser was an industry giant in the PC era. In its glory days, it once occupied the top three browsers along with IE and Firefox, but it fell behind when it was acquired by a Chinese buyer consortium in 2016. In 2016, Kunlun Wanwei and 360 led the establishment of a consortium, originally planned to acquire Opera Browser at a price of 1.24 billion US dollars. Later, due to regulatory pressure, the consortium announced that it would no longer aim to fully privatize Opera Browser as the acquisition target. Only acquired the Oppen browser brand and its core businesses such as mobile browsers and desktop browsers, and the total acquisition amount was also reduced to US$600 million. At that time, 360 acquired a 27.5% stake in Openg Browser at a price of US$158 million. After several rounds of equity incentive share registration, additional issuance, public offering of securities, and share repurchase, as of the end of the first half of this year, the company held 27.5% stake in Oppen Browser. About 20.30% stake in Peng Browser. In July 2018, Opera Browser was listed on Nasdaq. Since the beginning of this year, under the influence of multiple factors such as operating performance, the stock price of Openg Browser has continued to decline. The company's latest closing price is $4.03. The price of each ADS in the above transaction is 136.48% of the closing price and the average price of the previous 20 trading days. 117.52%, and 113.17% of the average price of the first 60 trading days. 360 belongs to the sale of equity at a premium. However, 360 is accounted for by the long-term equity investment equity method. As of now, the book value of Openg browser equity is about 201 million US dollars, and the difference from the sale price is about 72 million US dollars (according to the People's Bank of China on September 23, 2022). Exchange rate conversion, about 503 million yuan), the above difference may affect the company's financial statement investment income account, thereby reducing the company's current net profit, the final financial data is subject to the company's audited financial report. According to 360's introduction, the initial investment in Openg Browser is to make the two parties have business synergy in Internet business through cooperation at the level of equity relationship. However, the current strategic focus and main business of both parties have undergone major changes. Among them, 360 has transformed into a listed company with "Internet + security" two-wheel-driven main business with digital security as the core. At the same time, according to public information, Oppen Browser has also gradually become an Internet browser service provider in the early stage of investment. Expand to the Internet information distribution platform. 360 said that as the differences between the two sides in terms of business strategies have widened, and the profit level of Oppen Browser after deducting non-recurring gains and losses has been on a downward trend since 2019. Based on this, in order to further optimize the allocation of the company's assets and business resources, accelerate the return of funds, and concentrate resources to focus on the established business strategy of digital security as the core, it was decided to withdraw from this investment. In addition, 360 also considers the factors of stock liquidity when withdrawing from investment in Opera Browser. According to the announcement, given that the company holds a 20.30% stake in Opera Browser and the trading activity of Opera Browser in the U.S. stock public market is low, the average daily turnover rate since 2022 is only 0.1%. Possibility to sell shares at a suitable price in the secondary market. It is worth mentioning that, unlike 360 ​​and Opera Browser, Kunlun Wanwei, which took the lead in the acquisition, is already the controlling shareholder of Opera Browser. In 2020, Kunlun Wanwei, through its subsidiary Hong Kong Wanwei, acquired an 8.47% stake in the tradable shares of Oppen Browser. After the transaction is completed, Kunlun Wanwei will maintain a 53.88% stake in the company. In the first quarter of 2021, Kunlun Wanwei will officially merge with Openg Browser. 360 stated in the latest announcement that the controlling shareholder of Opera Browser holds 56.09%, and has the absolute dominance of the shareholders meeting of Opera Browser. According to the 2022 Interim Report of Opera Browser, the company’s first loss in the first half of the year was US$15.271 million, turning from profit to loss; total revenue was US$149 million, a year-on-year increase of 34.0%. The reporter noticed that Kunlun Wanwei recently responded to the problem of the decline in the operating data of the Openg browser on the interactive platform. The company's board secretary said that Opera's decline in MAU was due to the current shift of focus to high ARPU markets such as Europe and the Americas, resulting in a slight decline at the user level. But thanks to this shift in business focus, Opera’s revenue in the first half of the year was US$149 million, a year-on-year increase of 33.7%, and in the second quarter it achieved revenue of US$77.8 million, a year-on-year increase of 29% and a month-on-month increase of 9%, greatly exceeding expectations. At present, users in the United States and Europe account for 62% of the direct revenue generated by users, driving the growth of ARPU value. The company will continue to maintain healthy growth in the American and European markets, and is confident in the potential for future business development.
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