Buyout firms continue to gamble on take-private deals

Many Chinese companies listed in the US are finding life difficult these days as accusations of fraud and dodgy accounting continue to pile up. But, as one group of investors shuns these reverse-merger companies, some buyout firms are still convinced they can make money from taking them private and realising higher valuations by re-listing back in Asia.

US private equity firm Abax Global Capital likes the idea so much it has just completed its second take-private deal, having agreed a $364 million buyout of Nasdaq-listed Fushi Copperweld in partnership with the company’s chairman and co-chief executive, Li Fu.

Their offer of $9.50 a share was 21% higher...