Cloopen Weighs CEO-Led Buyout Amid China's Cloud Market Boom

BEIJING, China – December 29, 2025 – Cloopen Group Holding Limited (OTC: RAASY), a prominent Chinese cloud communications provider, today announced the formation of a special committee to evaluate a significant "going private" proposal led by its own founder and CEO, Mr. Changxun Sun. The move places the company at a critical crossroads, forcing a decision that could reshape its future against the backdrop of China's rapidly expanding cloud services industry.

The announcement confirms that the company's Board of Directors has tasked three independent directors—Mr. Adam J. Zhao, Mr. Tim Yimin Liu, and Mr. Ziguang Gao—with the responsibility of scrutinizing the non-binding offer. Mr. Zhao, who has a background as a Chief Financial Officer for former NYSE and Nasdaq-listed companies, will chair the committee.

The Board issued a standard but stern caution to investors, stating in its press release that "no decisions have been made with respect to the Proposal" and that there is "no assurance that any definitive offer will be received" or that a transaction will ultimately be consummated. This highlights the preliminary nature of the discussions and the significant uncertainty that now surrounds the company's future on the public market.

The Proposal on the Table

The proposal under consideration was first delivered to the board on December 22, 2025, by a consortium identified as the "Buyer Group." This group includes CEO Changxun Sun and private equity firm Trustbridge Partners VII, L.P. Their offer aims to acquire all outstanding shares of Cloopen not already owned by the group for a cash price of US$2.9641 per American Depositary Share (ADS).

This offer represents a substantial premium of 51.23% over the stock's closing price on the last trading day before the proposal was announced. It also reflects a 74.87% and 86.22% premium over the volume-weighted average price for the 15 and 30 trading days prior, respectively. The bid values the entire company at approximately US$155.92 million. Despite the attractive premium, the market's reaction was muted, even skeptical. Following the initial news of the proposal on December 24, Cloopen's stock paradoxically fell by nearly 8%, suggesting investor wariness about the deal's non-binding nature and the potential hurdles to its completion.

Independent Oversight Under Scrutiny

The formation of the special committee is a standard corporate governance procedure designed to ensure a fair evaluation process, particularly when company insiders are involved in a buyout proposal. The committee's independence is paramount as it navigates the inherent conflict of interest presented by a CEO-led acquisition.

The three members bring relevant expertise to the table. Mr. Zhao's extensive financial background, coupled with Mr. Liu's deep experience in corporate law, mergers and acquisitions, and shareholder rights, equips the committee with the necessary tools to assess the offer's financial fairness and legal integrity. Their primary duty is to represent the interests of all shareholders, especially minority investors who are not part of the Buyer Group.

This task is complicated by the Buyer Group's unique position. While they collectively own approximately 20.32% of Cloopen's outstanding shares, they control an estimated 53.98% of the company's voting power. This controlling stake gives the consortium significant leverage, raising concerns among market observers about the committee's ability to negotiate a higher price or reject the offer if it is deemed inadequate. The central challenge for Mr. Zhao's committee will be to ensure that the final decision serves the best interests of all shareholders, not just the controlling ones.

A Strategic Pivot in a Booming Market

The proposal arrives as China's cloud communications market is experiencing explosive growth. The sector, particularly Communications Platform as a Service (CPaaS), is projected to reach nearly USD 3 billion in 2024 and is a key driver of the broader Asia-Pacific market, which is forecast to grow from USD 8.88 billion in 2025 to over USD 59 billion by 2030. This expansion is fueled by widespread digital transformation, the rollout of 5G, and a thriving e-commerce ecosystem that demands sophisticated, integrated communication tools.

Cloopen operates in this highly competitive and fragmented landscape, which features around 800 service providers. As one of only about 20 full-suite providers offering a comprehensive range of CPaaS, contact center, and unified communications solutions, the company is well-positioned but faces intense pressure from larger players like Alibaba Cloud and Tencent Cloud, who are heavily investing in AI and integrating similar communication services into their platforms.

Taking the company private could offer strategic advantages. Freed from the short-term pressures of quarterly earnings reports and public market scrutiny, a private Cloopen could invest more aggressively in long-term research and development, pursue strategic acquisitions, and adapt more nimbly to the fast-paced market dynamics. Some analysts believe privatization is a logical step for companies looking to execute a major strategic pivot without public market volatility.

However, the path forward is anything but certain. The special committee must now undertake a thorough review, potentially hiring independent financial and legal advisors to assist in its evaluation. The outcome of their deliberation will determine whether Cloopen accepts the offer to go private, negotiates for better terms, or rejects the proposal to remain a publicly traded entity navigating the opportunities and challenges of China's dynamic tech sector.