China’s Focus Media Gets Offer to Go Private (FMCN, CG, AMCN, LAMR)
China’s largest digital display advertiser, Focus Media Holding Ltd. (NASDAQ: FMCN), announced today that it had received a preliminary offer from a group including the company’s chairman and CEO to take the company private for $5.40 a share, or $27.00…
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The consortium group making the offer includes subsidiaries of China’s CITIC Capital Partners, the Carlyle Group LLC (NASDAQ: CG), and China Everbright Bank. The group intends to fund the acquisition with cash and debt, and a number of banks have indicated that they are “highly confident of their ability to fully underwrite the debt financing” for the deal.
Focus Media’s shares have been faltering since hitting a 52-week high in mid-March, down nearly 20% at the beginning of August. The company competes in China with AirMedia Group Inc. (NASDAQ: AMCN), and is about the same size as U.S. outdoor media firm Lamar Advertising Co. (NASDAQ: LAMR). Lamar said last week that it was considering a conversion to a REIT to take advantage of the tax benefits, an announcement which sent the shares to a 52-week high.
It’s fairly common for the top executives of Chinese companies to offer to buy up their struggling companies in a going-private deal. Shareholders are unlikely to get a better offer, so the offers often are on the low side. This is probably another one of those kinds of deals.
Focus Media is are up 10.1% at $25.75 this morning in a 52-week range of $8.79 to $32.93.
Paul Ausick
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
