Why Sinovac's Super Bowl Moment Is Lost On U.S. Shareholders

The coverage of Chinese management buyout of companies listed on U.S. exchanges has been vast since last year. Joining that large list includes Chinese biotech company Sinovac Biotech Ltd. SVA.

Sinovac on Monday released two subsequent 6-K. The first 6-K announces the issuance of Good Manufacturing Practices certificate for EV71 vaccine. The second 6-K reports the company received a preliminary proposal from Chairman and CEO Weidong Yin to acquire the company for $6.18 per share.

Heng Ren Investments Managing Partner Peter Halesworth voiced his displeasure with Sinovac's timing of the proposal.

Related Link: Sinovac Confirms Acquisition Offer

In an email to Benzinga, Halesworth stated, "This is Sinovac's Super Bowl moment. Yet just when the champagne is popped and the championship trophy is about to be awarded, teammates who helped Sinovac win are inexplicably and unjustly locked out from their fair share of the rewards."

Halesworth elaborated, "Sinovac kicks shareholders off the bus right at the entrance of monetization - the same shareholders whose money helped make EV-71 possible."

Regarding the market for Sinovac's EV-71 product, Halesworth said the 1- to 5-year-old Chinese population is roughly 80 million with 17 million newborns each year. He noted that "vaccine experts" believe pricing could range from $10-$25 per dose, with high-risk situations seeing $50-$75 per dose.

What irks Halesworth is the timing of such an announcement, with the vaccine determination 6-K released one minute before the management buyout proposal. Summarizing his thoughts, Halesworth said the premium is not just "far too low," but "meager," calling the various equity market institutions to action.

"It's time the SEC, Nasdaq, the NYSE, and other U.S. institutions start to review these low-ball squeeze outs. It's hurting U.S. investor confidence in markets and stocks in an already challenging time for markets," he stated.

Shares of Sinovac were trading up 14.71 percent at $5.76 as of late Monday morning.