Friday shares surged nearly 18%

Exhibition Communications (NASDAQ:SPRD) Friday shares surged nearly 18% per cent, mainly because of a 1.5 billion-dollar purchase of the company by Tsinghua's purple-violet Group, the largest takeover offer for semiconductor manufacturers for about a year.

As of 13:07 (1:07 Beijing Time, 22nd), the share price rose 3.91 US dollars to $26.20, or 17.54%, after the Nasdaq conventional trading, hitting a 52-week high of $26.69. In the past 52 weeks, the highest price for the communications was 26.69 U.S. dollars, the lowest price of 14.50 U.S. dollars. The Violet Group has offered to buy the company's communications at a price of $28.50 per share of US depository receipts, which in a statement in Friday said the board was evaluating the offer.

The offer price offered by the Violet Group is 10.3 times times that of the company's EBITDA (i.e. net profit before interest, tax, depreciation and amortization). According to data compiled by Bloomberg, the offer price of nearly 90 comparable trades in the past 10 years is roughly the same as the EBITDA ratio.

"In terms of revenues and profits, the company's share price is much higher than the current level, and offer prices are certainly lower than their fair value," said Jay Srivatsa, Chardan Capital Markets equity analyst at New York Asset Management, in a telephone interview. "Srivatasa's rating for the communications stock is" buy ", which he believes should be valued at around $30 per share of US depository receipts.

Purple Light Group President Zhao Wei issued a statement, he said that from a strategic point of view, the acquisition of communications in line with the Violet Group's "overall business objectives." It will be one of the biggest deals in the industry since it acquired the Japanese chipmaker, Elpida Memory, at $4.4 billion a July 2012. In the past 10 years, the industry announced a total of 111 billion U.S. dollars, including private equity companies in 2006 to buy 16.2 billion U.S. dollars Freescale's deal.

In June 2011, the company became the target of shorting the firm's muddy Waters, alleging that its accounting methods were wrong. There is no problem with the communication of the exhibition. The share price of the communications has risen by more than a year since the Muddy Waters issued a short report.

Several Chinese companies listed in the US have opted to privatize as a result of the fall in share prices due to the allegations made by short sellers. The company's shares fell 74% after a bankruptcy filing. After completing a 3.8 billion dollar privatisation deal, the media had retreated from the Nasdaq last month. Muddy Waters in 2011 alleged that the media had exaggerated its advertising network. According to data compiled by Bloomberg, 23 U.S.-listed Chinese companies have completed privatisation since the beginning of 2010, and the total number of companies announcing the deal is 43.