Qihoo 360 Technology Co. Ltd.
- Company Name
- Qihoo 360 Technology Co. Ltd.
- Stock Symbol
- Class Period
- January 11, 2016 to July 15, 2016
- Motion Deadline
- March 18, 2019
- Southern District of New York
The complaint charges Qihoo 360 and certain of its executives with violations of the Securities Exchange Act of 1934. Qihoo 360 is purported to be the leading internet company in the People’s Republic of China.
On December 18, 2015, Qihoo 360 announced that it had entered into a definitive merger agreement pursuant to which it would be acquired by a consortium of investors in an “all-cash transaction valued at approximately $9.3 billion, including the redemption of approximately $1.6 billion of debt” (the “Merger”). Pursuant to the terms of the merger agreement, the Company’s shares and American Depositary Shares (“ADSs”) would cease to exist in exchange for the right to receive a cash amount without interest.
The complaint alleges that Qihoo 360 shareholders were misled into accepting consideration in the Merger that was well below fair value for their Qihoo 360 shares. Specifically, defendants failed to disclose that the Company’s Proxy materials and Annual Report misrepresented and/or omitted material information that was necessary for Company shareholders to make an informed decision concerning whether to vote in favor of the Merger and that, contrary to the representations in the Proxy and the Annual Report, the Company already had plans to relist its shares in China prior to closing the Merger and its delisting from the NYSE.
Contrary to the Company’s repeated reassurances that there would be no substantial changes to its structures or a relisting following the Merger, shortly after the going-private deal closed, media outlets reported on the Company’s relisting plan, which was formally announced on November 6, 2017. This deal, operating as a “backdoor listing,” would allow Qihoo 360 to return to the stock market by relisting on the Shanghai Stock Exchange at a multiple, to the detriment of shareholders who unknowingly sold Qihoo 360 stock and ADSs at substantially deflated values during the Class Period.