(Yicai) Nov. 7 -- Best’s shares surged after the Chinese logistics provider said it had received a preliminary buyout offer from a consortium of individuals and businesses that includes the firm’s founder and Alibaba Group’s Cainiao express delivery arm. 

In pre-market trading in New York today, Best [NYSE: BEST] was up 1.1 percent at USD2.69 a share as of 5.32 a.m. local time, following a 13.7 percent jump yesterday.

The buyer group comprises Zhou Shaoning, who is also Best’s chairman and chief executive, George Chow, chief strategy and investment officer, Denlux Logistics Technology Invest, Alibaba Investment, BJ Russell Holdings, and Cainiao Smart Logistics Investment, the Hangzhou-based target company announced late yesterday.

The consortium plans to pay USD0.144 per ordinary share or USD2.88 per American depositary share for Best, funding the acquisition with the group’s own equity capital and cash.

Founded in 2007, Best secured investment from Alibaba in the early days. But as competition heated up the firm sold its express delivery business in China to J&T Express for about CNY6.8 billion (USD933.6 million) in October 2021, resulting in its only profitable year after going public in September 2017.

The sale of its domestic business did not bring about a fundamental change, and since December 2021 Best’s stock price remained below USD1 for an extended period, leading it to implement a reverse stock split in May 2022 that failed to boost the shares.

Looking beyond Best’s privatization, a secondary listing in Hong Kong or a listing in the Chinese mainland are no longer likely due to the current market environment, MTPost reported today, citing Zhao Xiaomin, an expert in the express delivery sector. But it is very possible that Best will be integrated into Cainiao’s ecosystem as its cargo business can supplement that of the Alibaba affiliate, Zhao added.

Before Best’s initial public offering, Alibaba was its biggest shareholder with a 23.4 percent stake, followed by Zhou with 14.7 percent, according to the listing prospectus.

Editor: Emmi Laine