Focus Media Holding Ltd. (FMCN) said a group including Chairman
and Chief Executive Jason Nanchun Jiang has offered to take the
Chinese digital-advertising company private in a deal that values
Focus Media at roughly $3.66 billion.
The company said it received a preliminary nonbinding proposal
letter from affiliates of FountainVest Partners, Carlyle Group L.P.
(CG), CITIC Capital Partners, CDH Investments, China Everbright
Ltd. (0165.HK) and Mr. Jiang and his affiliates offering $27 per
American depositary share in cash. The price is a 15% premium to
Focus Media's Friday close of $23.38.
ADRs were recently trading 4.7% higher at $24.48 premarket. The
stock has risen 20% so far this year through Friday's close.
The company's board has formed a committee to consider the
proposed transaction, which would be financed with a combination of
debt and equity capital.
The company has reported quarterly profits for more than a year,
helped by growing revenue and an improving advertising market in
China. It has also benefited from restructuring that sloughed off
parts of its Internet and billboard businesses in the midst of a
six-quarter streak of losses.
The company had in recent months repeatedly denied accusations
by short seller Muddy Waters LLC that it fraudulently overstated
the number of screens in its LCD network and overpaid for
acquisitions to hide losses, calling the allegations incorrect and
misleading.
In the wake of the allegations, Focus Media has unveiled a
number of measures to prove its confidence in the company's
prospects, including a disclosure in November that its top
executive would purchase shares in a block trade and unveiling a
quarterly dividend in January.
Focus Media reported in May its first-quarter profit rose 84% as
revenue jumped 32%.
Write to Melodie Warner at melodie.warner@dowjones.com
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