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Focus accepts US$3.7b buyout bid
By Ding Yining |
December 21, 2012, Friday
|
Print Edition
Print Edition
THE board of advertising firm Focus Media has accepted a US$3.7 billion buyout bid to go private, joining a rising number of Chinese media and Internet firms that are exiting the US stock market.
A consortium of investors led by its Chairman and CEO Jason Jiang and institutional investors, including Carlyle Group, CITIC Capital Partners and China Everbright Ltd, will pay US$27.50 per share for the deal, 50 cents higher than the initial offering which was first announced in August this year.
The deal, expected to be completed by the second quarter of next year, needs two thirds of Focus' shareholders' approval, NASDAQ-listed Focus Media said in a statement yesterday.
Jiang is the firm's largest shareholder with 17.9 percent, and Shanghai-based private conglomerate Fosun International is the biggest institutional investor with about 18 percent.
A rising number of Chinese stocks are seeking to exit the US exchanges after concerns about their corporate governance depressed their valuations.
In November last year, Focus Media shares plunged nearly 40 percent after short-seller Muddy Waters put a "strong sell" rating on the stock, saying the firm had inflated the number of screens in its LCD network by 50 percent and deliberately overpaid for acquisitions.
Its share price has recovered since then and traded US$20 to US$25 in recent months.
Shanghai-based Focus Media operates LCD display advertising screens in lobbies in office buildings and advertising poster frames in residential buildings. It has been extending its network in lower tier cities.
This year, 12 US-listed Chinese firms planned to privatize after tighter scrutiny from US authorities, ChinaVenture said.
A consortium of investors led by its Chairman and CEO Jason Jiang and institutional investors, including Carlyle Group, CITIC Capital Partners and China Everbright Ltd, will pay US$27.50 per share for the deal, 50 cents higher than the initial offering which was first announced in August this year.
The deal, expected to be completed by the second quarter of next year, needs two thirds of Focus' shareholders' approval, NASDAQ-listed Focus Media said in a statement yesterday.
Jiang is the firm's largest shareholder with 17.9 percent, and Shanghai-based private conglomerate Fosun International is the biggest institutional investor with about 18 percent.
A rising number of Chinese stocks are seeking to exit the US exchanges after concerns about their corporate governance depressed their valuations.
In November last year, Focus Media shares plunged nearly 40 percent after short-seller Muddy Waters put a "strong sell" rating on the stock, saying the firm had inflated the number of screens in its LCD network by 50 percent and deliberately overpaid for acquisitions.
Its share price has recovered since then and traded US$20 to US$25 in recent months.
Shanghai-based Focus Media operates LCD display advertising screens in lobbies in office buildings and advertising poster frames in residential buildings. It has been extending its network in lower tier cities.
This year, 12 US-listed Chinese firms planned to privatize after tighter scrutiny from US authorities, ChinaVenture said.
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