Cryptocurrency Exchange Huobi Plans to Acquire Public Hong Kong Firm in $77 Million Deal

Digital asset exchange Huobi appears to be pursuing a reverse initial public offering (IPO), according to a document shared with the Hong Kong Stock Exchange (HKEX).

Hong Kong-listed electronics firm Pantronics Holdings Limited, which was acquired by Huobi in August 2018, will be changing its company name to Huobi Technology Holdings Limited. This, according to the filing, posted on September 10, 2019.

At the time of the acquisition, Pantronics had transferred over 221 million ordinary shares to Huobi Group, according to shareholding disclosures. The leading digital currency exchange became the majority shareholder in Pantronics after the $77 million purchase, with more than a 73% stake in the firm.

The deal between the two companies may provide Huobi an opportunity to perform a reverse takeover, which would allow the crypto exchange to go public in Hong Kong.

The takeover might be subject to stricter regulations on backdoor IPOs, which are being developed by the HKEX. The stock exchange noted that it would update its regulatory guidelines by October 1, making reverse takeovers more difficult for firms that acquire Hong Kong-based publicly listed companies from different industries.

Other major players in the crypto industry are also considering going public in other jurisdictions, after facing challenges in Hong Kong.

Chinese mining giant Bitmain’s IPO in Hong Kong was unsuccessful, as it was allowed to expire. The company’s management may now be looking to enter the US markets. 

Canaan Creative, another crypto mining firm, also reportedly filed an IPO in the US after a failed  attempt in Hong Kong.

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