Why 51job Stock Just Popped by 11%

What happened

Shares of 51job (NASDAQ: JOBS) were trading 11% higher as of 1:15 p.m. EDT Thursday after the Chinese job-search website revealed that Beijing-based private equity firm DCP Capital Partners had approached it with a buyout proposal.  

So what

DCP is proposing to pay $79.05 per share for 51job in a buyout valued at $5.3 billion, using a combination of cash on hand and debt financing.

Wall painting depicts a large yellow fish eating a smaller yellow fish

Image source: Getty Images.

Now what

Just because a proposal has been made does not mean that it will evolve into a definite offer, that such an offer will be accepted, or that regulators will permit a deal to proceed. For now, all 51job is saying is that it "plans to evaluate the Proposed Transaction" -- and does not even undertake to "provide any updates with respect to this or any other transaction" to its shareholders.

For the time being, it seems investors must accept being left in the dark. That doesn't seem to be keeping them from betting on a positive outcome, however. Indeed, with 51job shares trading in the vicinity of $79.20 early in the afternoon, they appear to be betting not only that a definite offer will be made -- but that 51job will ultimately be able to negotiate a higher buyout price for itself.

10 stocks we like better than 51job
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and 51job wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of August 1, 2020


Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends 51job. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More