Focus Media accepts US$3.7b buyout offer
Leveraged takeover and delisting of the Shanghai-based display-advertising provider represents China's biggest private equity deal
Focus Media has agreed to go private in a US$3.7 billion acquisition led by its founding chairman, global investment firm Carlyle Group and leading mainland private equity companies.
This transaction would be the largest leveraged buyout deal in China. It is expected to close in the second quarter of next year, subject to the affirming vote from at least two-thirds of Focus Media shareholders.
The Shanghai-based display-advertising services giant yesterday accepted an offer of US$27.50 per American depositary share (ADS). This represents a 17.6 per cent premium over the Nasdaq-listed company's closing price of US$23.38 per ADS on August 10, which was the last trading day before the proposed takeover was announced. The final offer was higher than the earlier bid of US$27 per ADS.
The buying consortium includes Focus Media chairman and chief executive Jason Nanchun Jiang; the affiliates of and funds managed by the Carlyle-owned Giovanna Investment Holdings; Gio2 Holdings, which is controlled by FountainVest China Growth Capital Funds; Power Star Holdings, owned by Citic Capital China Partners II, and State Success, controlled by affiliates of China Everbright Structured Investment Holdings.
Shanghai conglomerate Fosun International will also become a beneficial owner after the deal is completed. Fosun and Jiang own a combined 35.5 per cent of Focus Media's outstanding shares.
A group of Western and Chinese banks have committed to providing US$1.525 billion in debt financing for the transaction. The banks providing the financing include Bank of America, Citibank, Deutsche Bank, Credit Suisse, China Development Bank, China Minsheng Banking Corp and ICBC International Capital.
