Chinese giant Dali Foods, delisted from the Hong Kong Stock Exchange

Xu Shihui, the billionaire chairman and chief executive of Dali Foods Group Co., won shareholder approval for a $6.5 billion takeover of the company, and Thursday was the last trading session for the Chinese food giant's shares, which debuted on scholarship eight years ago, according to forbes.com.

In an Aug. 23 filing with the Hong Kong Stock Exchange, Dali Foods announced the result of the vote on the privatization plan that Xu Shihui unveiled in June. Citing reasons including poor stock performance and limited ability to raise funds through the market, the 65-year-old tycoon offered to take the company private at a price of HK$3.75 per share. The closing price on August 24, the last day of trading, was HK$3.73.

The proposal to go into private ownership surprised many and triggered an increase in the price of Dali Foods shares. Xu Shihui, who gets almost all of his wealth from his 85% stake in the company, earned about $1.2 billion after the announcement. The tycoon, whose fortune is currently 7.5 billion dollars, can probably finance the privatization business with the cash at his disposal, writes Forbes. According to expectations, it will pay about 728 million dollars for the acquisition of the rest that it did not own in Dali Foods. The amount could easily be covered from the nearly two billion dollars - dividends that Xu Shihui has received from Dali Foods over the years, according to Forbes estimates.

• Shares of Dali Foods, on a downward trend after the peak reached in 2018

The transformation into a private company offers benefits to Dali Foods, such as greater flexibility in implementing strategic decisions and facilitating business transformation, according to the June proposal. Founded by Xu Shihui in 1989 in the southern Chinese city of Quanzhou, Dali Foods has expanded rapidly due to demand for its low-cost snacks, which are now sold by more than 6,500 distributors across the country. Dali Foods went public in 2015 after raising $1.2 billion in its initial public offering since then.

But the company's shares have continued to fall after reaching a peak in 2018 as Dali Foods faces challenges - from changes in consumer spending habits to the emergence of newer brands. In 2022, the company reduced its sales by 10.5%, to 2.7 billion dollars, and the net profit - by 20%, to 410.7 million dollars, as the restrictions imposed due to the pandemic had, in turn, an impact on demand.