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Focus Media shares surge as buyout plan unveiled
By Ding Yining |
August 14, 2012, Tuesday
|
Online Edition
Online Edition
SHARES of Focus Media hiked 8.9 percent yesterday to US$25.45 after the company revealed a takeover proposal by private equity firms and senior executives.
The Shanghai-based outdoor advertising company said it has received a non-binding offer to delist the firm at US$27 per share.
The US$3.5 billion buyout of the NASDAQ-listed firm is the latest example of overseas-listed Chinese companies making efforts to go private at a time when some of them are undervalued due to tighter scrutiny by regulators.
So far, 12 US-listed Chinese firms have announced privatization plans.
"Focus Media took advantage of a relatively weak market and aims to regain control of company's long-term strategy," said Feng Po, an analyst with investment consulting firm ChinaVenture Group.
Private equity firms include Carlyle, CDH Investment and FountainVest Partners, Citic Capital Partners, China Everbright Ltd, and affiliated companies of Focus Media founder and chairman Jason Jiang.
They would form an acquisition company to handle privatization transaction, using a combination of debts and equities to finance the purchase.
"The company's board of directors has formed a committee of independent directors to consider the proposed transaction," Focus Media said in the statement. The proposal needs to be approved by shareholders and the company didn't set any timetable for the deal.
Citigroup, Credit Suisse and DBS Bank are backing the Focus Media deal, and indicated confidence for underwriting the buyout financing, Focus Media said.
Shares of the Shanghai-based advertising network plunged 39.5 percent to US$17.5 on November 21 last year after short-seller Muddy Waters alleged dodgy financial figures and put a "strong sell" rating on the stock. That wiped off US$1.36 billion of the company's market value in a single trading day.
Focus Media later denied such charges and share price returned to above US$20.
The Shanghai-based outdoor advertising company said it has received a non-binding offer to delist the firm at US$27 per share.
The US$3.5 billion buyout of the NASDAQ-listed firm is the latest example of overseas-listed Chinese companies making efforts to go private at a time when some of them are undervalued due to tighter scrutiny by regulators.
So far, 12 US-listed Chinese firms have announced privatization plans.
"Focus Media took advantage of a relatively weak market and aims to regain control of company's long-term strategy," said Feng Po, an analyst with investment consulting firm ChinaVenture Group.
Private equity firms include Carlyle, CDH Investment and FountainVest Partners, Citic Capital Partners, China Everbright Ltd, and affiliated companies of Focus Media founder and chairman Jason Jiang.
They would form an acquisition company to handle privatization transaction, using a combination of debts and equities to finance the purchase.
"The company's board of directors has formed a committee of independent directors to consider the proposed transaction," Focus Media said in the statement. The proposal needs to be approved by shareholders and the company didn't set any timetable for the deal.
Citigroup, Credit Suisse and DBS Bank are backing the Focus Media deal, and indicated confidence for underwriting the buyout financing, Focus Media said.
Shares of the Shanghai-based advertising network plunged 39.5 percent to US$17.5 on November 21 last year after short-seller Muddy Waters alleged dodgy financial figures and put a "strong sell" rating on the stock. That wiped off US$1.36 billion of the company's market value in a single trading day.
Focus Media later denied such charges and share price returned to above US$20.
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