Tags: carlyle | focus-media | buyout | china

Carlyle, Other Investors Bid for China's Focus Media

Monday, 13 August 2012 12:11 PM

Focus Media Holding Ltd., a Chinese advertising company, received a takeover proposal from private-equity firms including Carlyle Group LP in what would be the country’s largest leveraged buyout.

The bidders made a “non-binding” offer of $27 per American depositary share, the Shanghai-based company said Monday in a statement. That’s 15 percent more than Focus Media’s Friday closing price and values the stock, which trades on the Nasdaq Stock Market, at about $3.5 billion, according to data compiled by Bloomberg.

“Focus Media is very dominant in the public-display advertising space in China and has geographically diversified itself throughout China’s big cities,” said Timothy Ghriskey, chief investment officer of Solaris Group LLC, a New York-based firm that sold its stake in the company during the second quarter of 2011.

Private-equity investors including Carlyle and TPG Capital are turning to China and its growing middle class as the volume of deals shrinks in Europe and the U.S. Focus Media runs an out-of-home advertising network in China, using audiovisual television displays placed in cities and large venues.

In addition to Washington-based Carlyle, the bidders are Chinese firms FountainVest Partners, Citic Capital Partners, CDH Investments and China Everbright Ltd., the company said in the statement. Joining the group is Jason Nanchu Jian, Focus Media’s chief executive officer.

Financing Letter

“The company’s board of directors has formed a committee of independent directors to consider the proposed transaction,” the company said in the statement.

The investor group plans to use a combination of debt and equity to finance the purchase. The bidders have provided a letter from Citigroup Inc., Credit Suisse AG, and DBS Bank Ltd. stating the banks are “highly confident” of their ability to fully underwrite the debt financing of the deal, the company said in the statement.

The ADRs rose 9 percent to $25.50 at 11:16 a.m. in New York after earlier climbing as high as $26.46. Focus Media has about 129.3 million ADRs outstanding.

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Monday, 13 August 2012 12:11 PM
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