PE-backed Giant to re-list in Shenzhen via reverse merger

Chongqing New Century Cruise, a listed company operates cruise ships and travel agencies, said in a regulatory filing that it reached an asset restructuring agreement with Yuzhu Shi, CEO of Giant, on September 30. Chongqing New Century will acquire 100% Giant from existing shareholders, and the listed shell will raise funds through private placement to finance the deal. Due diligence is currently underway.

ChongQing New Century Cruise previously considered an asset swap with Chinese semiconductor developer Truly Opto-Electronics but a deal failed to materialize.

Giant went public in the US in 2007. Last year, a consortium led by Baring Private Equity Asia, Hony Capital, CDH Investments' wealth management platform and Shi completed a privatization that valued the company at approximately $2.9 billion. The consortium owns about 49.3% of Giant, the majority of which is held by Shi.

Founded in 2004, Giant focuses on massively multiplayer online role playing games and currently operates 15 titles, of which 12 are self-developed. It has a development team of 840 people and a distribution network that reaches 99,000 retail outlets, including internet cafes, software stores, supermarkets and bookstores, where users can buy game credits.

The company is also developing web games and mobile games, and generates further revenue by licensing its games in markets beyond China.

Giant posted net income of RMB1.33 billion ($220.7 million) for 2013, up from RMB1.1 billion the previous year. Net revenue for 2013 came to RMB2.36 billion. It had peak quarterly users for the period of 2.32 million and 697,000 average quarterly concurrent users.

Giant represented the second-largest private equity-backed take-private of a US-listed Chinese company, following the $3.7 billion acquisition of Focus Media by The Carlyle Group, FountainVest Partners, CITIC Capital Partners and China Everbright, in conjunction with company management and Fosun International.

Focus Media is also seeking to re-list in Shenzhen through a reverse merger. Last month, it found a new shell company - Shenzhen-listed communications equipment manufacturer Hedy Holdings - for a backdoor listing worth RMB45.7 billion ($7.37 billion). This came after the chairman of Hongda New Material, Focus Media's initial target shell company, resigned from the firm in response to a probe by authorities.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Exits
• Technology
• Consumer
• China
• TMT
• Exit
• Baring Private Equity Asia
• Hony Capital
• CDH Investments Management
• USA
• Consumer