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Emachines agrees to buyout

The low-cost PC maker, which was delisted from the Nasdaq earlier this year, plans to allow one of its own board members to buy the company.

Low-cost PC maker Emachines has agreed to be bought out by one of its own board members in a deal valued at $161 million.

Under the terms of the deal, EM Holdings, which is wholly owned by Emachines Director Lap Shun "John" Hui, will offer $1.06 for each Emachines share. That's 35 percent higher than the 78 cents per share that Hui initially offered earlier this month.

Emachines shares were trading at 43 cents before Hui's initial offer was made public Nov. 9. The stock was delisted from the Nasdaq in May and has been trading on the over-the-counter bulletin board since then. In midday trading Monday, Emachines was at 96 cents, virtually unchanged from Friday's closing price.

The new deal was reached last week after it was unanimously approved by the company's board of directors, excluding Hui, who did not participate in the deliberations, according to Irvine, Calif.-based Emachines.

"We are very pleased that our review of Emachines' strategic alternatives has resulted in this transaction, which allows stockholders to receive cash for all their shares at an attractive price," Emachines CEO Wayne Inouye said in a statement.

Inouye joined the company in February, after the departure of co-founder and then-CEO Stephen Dukker.

EM Holdings expects to begin its tender offer to Emachines shareholders Monday. The buyout company will use funding from UBS Warburg and Hui to pay for the deal. Upon completion of the tender offer, Emachines will become a private company.