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Huobi acquires Pantronics Holdings in $70 million deal

Cryptocurrency exchange Huobi has become the largest shareholder of a public firm listed in Hong Kong.

On August 29, Pantronics Holdings, the acquired firm, released a statement saying Huobi Group had completed the deal by purchasing about 199 million of its shares via two of the group’s subsidiaries – Huobi Capital and Huobi Universal.

With that amount, Li Lin, chairman of Huobi Group and controller of the two subsidiaries, now owns 66.26% of Pantronics and is effectively the largest individual substantial shareholder.

The deal could further give Huobi the opportunity of a back-door listing in the future – a process where a private firm enters the secondary financial market by purchasing a major number of shares of a public company.

Based on the announcement, the transactions were made at an average price of HK$2.72 (or $0.35) per share with a total amount close to $70 million.

In a disclosure of interests filed by Pantronics on August 21, Huobi was seeking to purchase 73.73% of the firm’s ordinary shares which would have cost a total of $77 million. Pantronics’ shareholding disclosures were further amended on August 28 to reflect the change.

The document issued on Wednesday offered a peek into Huobi’s corporate structure, such as the stakes held by notable investors of Huobi. Based on the document, while Huobi Capital is fully owned by Li himself, Huobi Universal’s largest owners include Techwealth (58.44%), Sequoia Capital CV IV (23.32%) and Zhen Partners Fund I (7.46%). Among them, Techwealth is an investment company, of which Li owns 89.09%.