(By Balaseshan) LJ International Inc. (NASDAQ:JADE) shares gained 7.03% in premarket after the colored gemstone and diamond jeweler announced the formation of special committee to review "going private" proposal.
The company's board of directors has formed a special committee of disinterested directors consisting of 3 independent directors to consider the non-binding proposal from Chairman, President and Chief Executive Yu Chuan Yih and Urban Prosperity Holdings Ltd., an affiliate of FountainVest Partners.
Yih and Urban Prosperity proposed to acquire all of the outstanding ordinary shares of the company not currently owned by Yih at a price of $2.00 per ordinary share in cash. Yih currently beneficially owns, in the aggregate, about 11% of the company's outstanding ordinary shares.
The 3 independent directors are Xiang Xiong Deng, Jin Wang and Jieyun Yu. The special committee plans to retain an independent financial advisor and legal counsel to assist it in its work.
LJ International said no decisions have been made by the special committee with respect to the company's response to the proposed transaction.
LJ International is engaged in the designing, branding, marketing and distribution of its full range of jewelry. While the company specializes in the colored jewelry segment, it also offers high-end pieces set in yellow gold, white gold or sterling silver and adorned with colored stones, diamonds, pearls and precious stones.
JADE closed Tuesday's regular session down 0.54% at $1.85. The stock has been trading between $1.24 and $2.91 for the past 52 weeks.