Fosun expresses support for Focus Media take-private
China's Fosun International, Focus Media’s second-largest shareholder, with a 17.2% stake, said the recent take-private proposal for the Shanghai-based advertising company by a private equity consortium is an attractive option for shareholders. Fosun’s announcement came a day after media reports indicated that the investment firm was unaware of the privatization plan.
On Monday, US-listed Focus Media announced a $3.5 billion offer from investors to take the company private, in what could be China's largest leveraged buyout. The bidders - CEO Jason Jiang, The Carlyle Group, FountainVest Partners, CITIC Capital Partners, CDH Investments and China Everbright - made a non-binding offer of $27 for each American depositary share.
Fosun responded on Tuesday that the proposal delivers "full shareholder value for Fosun and it is Fosun's intention to support the transaction", adding that it does not anticipate supporting any competing proposals that do not include CEO Jiang as a participant.
According to a statement released by Focus Media, the bidders have been in discussions with Citigroup, Credit Suisse and DBS Bank about financing the buyout. These banks already provided Carlyle, FountainVest and CITIC Capital Partners with a ‘highly confident' letter on Saturday, indicating that they believe they can fully underwrite the debt financing for the acquisition.
Founded in 2003, Focus Media operates an advertising network in various Chinese urban locations. The company uses audiovisual television displays that are placed primarily in high-traffic areas of commercial office buildings such as in lobbies and near elevators, as well as in large retail chain stores and other venues.
In 2011, total net revenue of Focus Media was $792.6 million, an increase of 54% from $516.3 million in 2010, with a net income of $200.9 million, compared to $184.3 million last year.
The company's other investors include Wellington Management, Eastspring Investments and Capital World Investors, which own 4.6%, 4.4% and 4.3% respectively.
More on Greater China
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.