Cogo Group Inc. said on Tuesday that it has a deal with its chairman and CEO, Jeffrey Kang, to buy some of its subsidiaries for $78 million.
Cogo connects semiconductor companies to industrial and technology customers in China.
On Sept. 24, the company had said it was working with Kang on a possible sale that amounted to 30 percent of the company's assets. The payments anticipated at the time would have included $10 million at closing and $68 million by the end of 2012. On Tuesday, it said the main terms of the deal were the same as in the Sept. 24 announcement.
Also Tuesday, the company said it is buying back its own stock as part of a 10b5-1 plan. Such plans are used by major shareholders, including executives, to sell shares in a company. Cogo did not say which shareholder had filed the 10b5-1 plan, and a message left with Cogo's investor relations department was not immediately returned.
In a prepared statement, Kang said the deal for him to buy some units of the company "brings us one step closer towards maximizing value for shareholders of Cogo. We believe this deal validates the financial assets of Cogo that are currently being significantly discounted by the financial markets" and that the share buybacks will benefit shareholders.
Shares of the Chinese company jumped 25 cents, or 11 percent, to close at $2.58. They are up nearly 50 percent this year, but are worth just a fraction of their peak of $22.50 from October 2007.
- Investment & Company Information