Huobi, one of the biggest crypto exchanges in the world with trading volumes in excess of USD 500 million per day, has reportedly acquired Pantronics Holdings Ltd via purchasing 73.73% of its stock for USD 77 million.
Pantronics is a manufacturer of electronics equipment and is listed publicly on the Hong Kong stock exchange. Huobi might have acquired it to conduct a reverse takeover, which would allow the exchange to become a publicly-listed company without going through the lengthy initial public offering (IPO) approval process.
The CEO of Huobi, Li Lin, was asked if his company intends to do a backdoor listing with this acquisition. While dismissing the rumor, he stopped short of denial, leaving the possibility open. He said if Huobi did a reverse takeover it would be difficult to manage since it wasn’t compliant in every country.
To be fair, there is always the possibility Huobi is just making an investment. It would have to gut Pantronics and turn it into a shell company to do a reverse takeover, which would upset the company and would be very difficult for regulators to approve.
There is no crypto exchange in the world that is publicly listed and it seems unlikely that regulators would allow the first publicly-listed crypto exchange to happen through a reverse takeover. Trading of Pantronics on the Hong Kong stock exchange has been halted as of 22 August 2018 until regulators give approval for Huobi to buy that much stock. Regulators will also have the choice in the future to delist Pantronics if Huobi turns it into a shell company for a reverse takeover, if it gets that far.
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