Job Search Site Zhaopin Investors Mull Private Placement

(Bloomberg) -- Several shareholders in Chinese online recruitment firm Zhaopin Ltd., are weighing options for their holdings, including a private placement that could raise about $500 million, people with knowledge of the matter said.

Investors including FountainVest Partners Co. and Hillhouse Capital Management are working with an adviser to explore options to diversify Zhaopin’s ownership, including selling down their existing stakes via a placement, said the people. The adviser has reached out to potential investors to gauge their interest, said the people, who asked not to be identified as the information is confidential.

The owners intend to retain a collective 51% stake in the business, and to sell the rest in phases, one of the people said.

The company, which operates job search website Zhaopin.com, was founded in 1994, according to a regulatory filing. It was taken private by Australia’s Seek Ltd., FountainVest and Hillhouse in 2017 and was delisted from the Nasdaq.

Zhaopin shareholders’ deliberations are at an early stage, and they may decide against a sale, said the people. Representatives for FountainVest, Hillhouse and Seek declined to comment.

The job recruitment site attracted 4.9 million unique visitors on average per day in fiscal 2020, up nearly 29% from the previous year, according to Seek’s most recent earnings presentation. Despite the coronavirus pandemic’s impact, Seek reported Zhaopin’s net income for the year ended June 30 as A$42.2 million ($30.6 million). The company attributed Zhaopin’s performance to revenue from business process outsourcing as well as cost efficiencies.

China’s employment situation has been badly hit after the coronavirus outbreak earlier this year shut large portions of the economy for months. The surveyed urban unemployment rate rose to a record 6.2% in February before inching down to 5.7% in June and July. The country also has a record 8.74 million recent graduates entering the job market this summer. China’s leaders have pledged to support job growth, and the four largest banks are ramping up recruitment of fresh graduates.

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With assistance from Bloomberg