Xinhua Finance Media Limited (NASDAQ:XFML) may have found a savior. Investment firm Yucaipa has signed a deal to buy a block of Xinhua Finance Media shares from certain stockholders that have come off the initial public offering lock-up period. It would likely have been better if the shares purchased included some from the company or from the open market, but this is still a great score for Xinhua Finance Media.
One of Yucaipa’s partners, David Olson, will join Xinhua as an independent director as part of the transaction. The Yucaipa Companies is a premier investment firm that has established a record of fostering economic value through the growth and responsible development of companies. Since its founding in 1986, the firm has completed mergers and acquisitions valued at more than $30 billion. As an investor, Yucaipa works with management and contributes at the board level.
Fredy Bush, CEO/Chairman of Xinhua Finance Media: "The addition of David as an independent board member will increase the strength of our corporate governance and strategic development. We are thrilled to be forging this new relationship with a world-class firm like Yucaipa."
Shares are gapping up big with roughly a 17% gain to $9.25, compared to a $7.88 close. Shares are actually well up from teh 52-week lows of $5.06 after the tarred news that came out since the IPO. This was one of those IPO’s that should have done well because it was in all the right places, but there were some serious issues that came to light immediately after the IPO and the IPO came shortly before a mini-meltdown overseas too.
Related articles of interest:
- 24/7 Wall St.: Xinhua Finance Media Under More Fire (XFML)
- Xinhua Finance Media Defending itself, Plus a Buyback (XFML)
- Media Mania After Dow Jones & News Corp. Merger Talk
Jon C. Ogg
September 26, 2007