NEW YORK (TheStreet) -- Shares of E-House (China) Holdings (EJ) were gaining 4% to $6.98 Tuesday after the Chinese real estate services company received a preliminary non-binding "going private" proposal from two board members.
E-House said that it received the proposal from co-chairman and CEO Xin Zhou and board member Neil Nanpeng Shen. The two board members offered to buy all shares of the company they don't currently own for $7.38 an American depositary share.
Zhou and Shen said they and their affiliates own about 26% of E-House's total outstanding shares.
E-House said it formed a special committee of five independent, disinterested directors to consider the transaction.
About 2.3 million share of E-House were traded by 10:15 a.m. Tuesday, above the company's average trading volume of about 2.2 million shares a day.
TheStreet Ratings team rates E-HOUSE CHINA HOLDINGS -ADR as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate E-HOUSE CHINA HOLDINGS -ADR (EJ) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."