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November 18, 2015

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Focus to relist via domestic reverse merger

FOCUS Media Holding Ltd, an outdoor advertising display company that delisted in the United States two years ago, has received regulatory approval to list on the domestic market via a reverse merger.

Focus Media will be bought out by Hedy Holding Co, a Shenzhen-listed manufacturer of computers and electronic equipment, in a deal worth 45.7 billion yuan (US$7.2 billion).

The relisting plan has been approved by the China Securities Regulatory Commission, Hedy said in a filing yesterday. Shares of Hedy jumped by the daily limit of 10 percent yesterday after trading resumed from a one-week suspension.

Focus Media’s relisting has set a precedent for US-listed Chinese companies seeking to go private and relist on the domestic market, industry experts said.

“In the case of Focus Media, it took a little more than one month to gain the approval, indicating a favorable regulatory environment for the return of overseas listings,” Tian Lai, financial consultant of the investment bank department of Huatai Securities, told the Shanghai International Private Equity Forum yesterday. Tian took part in the process for relisting of Focus Media.

Spurred by rising valuations on domestic bourses, dozens of Chinese companies that listed on exchanges in the US are now seeking to be taken private and relist on the domestic market.

So far this year, 26 companies have unveiled privatization plans, compared with a total of 40 companies delisted from the US exchanges between 2011 and 2015.


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