The Cayman Islands Grand Court has ruled that dissenting shareholders in 58.com Inc. are entitled to receive $56 per American Depositary Share, matching the price paid in the company’s 2020 management-led take-private merger.
The decision rejected claims by dissenting investors that the shares were worth nearly $106 each and marks a significant ruling in Cayman Islands appraisal litigation involving shareholder disputes over merger valuations.
The case arose from 58.com’s $8.7 billion privatization in September 2020, which was the largest take-private transaction involving a Chinese company at the time. The company operated one of China’s largest online classifieds platforms and traded on the New York Stock Exchange under the ticker WUBA before the merger.
In a judgment delivered by Chief Justice Margaret Ramsay-Hale, the Grand Court found that the merger price represented the most reliable indicator of fair value. The court rejected the dissenters’ argument that the transaction process was flawed and that the merger price should carry no weight.
The dissenting shareholders had argued that the buyout process was controlled by company founder Jinbo “Michael” Yao and relied on a discounted cash flow analysis that valued the shares at about $105.78 each. The court instead concluded that the negotiated merger price reflected a credible market-based valuation.
According to the judgment, the court found the transaction involved commercially sophisticated parties, independent oversight by a special committee and extensive negotiations before the deal was approved by shareholders in September 2020.
The ruling also relied on guidance from the Privy Council’s 2025 decision in Maso Capital Investments Ltd v Trina Solar Ltd, which emphasized that courts should assess the reliability of merger pricing through a fact-specific review rather than rigid procedural standards.
Maples Group said the decision reinforces the importance of negotiated merger prices in Cayman Islands appraisal cases, particularly in management-led transactions involving public companies.
Maples Group’s Caroline Moran and Malachi Sweetman, instructing Mac Imrie KC and Richard Boulton KC of One Essex Court, represented the company from the time of the merger and throughout the six-week trial heard between June and September 2024, and in post-hearing submissions addressing the Privy Council’s landmark decision in Trina Solar.
