The following press releases and media reports about Chinese companies were carried on December 30. To view a full article or story, click on the link next to the headline.
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Baidu (Nasdaq: BIDU) Takeout Delivery Seeks $300-500 Mln in Funding – Sources (English article)
European Chamber Says Still Has Concerns on China Anti-Terror Law (English article)
Bottom line: Momo may be reconsidering its de-listing plan as it approaches profitability and becomes comfortable in New York, while Shanda’s final de-listing testifies to the resourcefulness and tenacity of founder Chen Tianqiao.
Shanda NY listing nears end game
Two companies aiming to de-list from New York are in the headlines as the weekend approaches, led by word that Shanda Games (Nasdaq: GAME) is finally packing its bags and heading home after a long and difficult privatization process lasting nearly 2 years. At the other end of the spectrum is social networking app maker Momo (Nasdaq: MOMO), which was aiming to capture the record for shortest life as a US-listed company when it announced a privatization bid in June just 7 months after its Nasdaq IPO.
I’ve written quite a few times about Shanda Games’ imminent de-listing, only to see the buyout derail for different reasons. But this time it really does look final after shareholders approved a buyout deal that has now formally closed. (company announcement) Meantime, Momo has just announced quarterly results that show it is almost profitable. But what’s perhaps equally interesting is the lack of any mention of its own previously announced buyout offer in the report, which could perhaps imply a change of direction. Read Full Post…
Bottom line: Shanda Games’ imminent de-listing could be followed by a behind-the-scenes consolidation by one or more savvy private equity firms to create a major new online game firm capable of challenging NetEase or even Tencent.
Shanda Games heads for de-listing door
Faded online gaming pioneer Shanda Games (Nasdaq: GAME) is finally heading for greener pastures, releasing what’s likely to be its final earnings report as its shareholders get set to vote on a plan to privatize the company. Shanda Games’ road to privatization has been long and tortured, and is only now finally coming to completion after its initial announcement nearly 2 years ago. (previous post) But that said, I do have to commend Shanda’s strong-willed founder and chief Chen Tianqiao for finally getting the job done.
From a broader perspective, Shanda’s departure continues a trend that has seen online game companies de-listing en mass, after their stocks struggled for years due to stiff competition. In an interesting twist to that trend, these gaming laggards have been one of the few groups to actually complete privatizations among the 3 dozen US-traded Chinese companies that announced such buyouts earlier this year. Read Full Post…
Bottom line: The pending collapse of Citic Securities’ bid for Russell Investments is the direct result of company instability due to corruption allegations and stock market volatility, and highlights the risk of doing business with big state-run companies.
Instability sinks Citic’s bid for Russell
Recent turbulence in China’s corporate world may be set to claim one of its first big victims, with word that a deal to sell fund manager Russell Investments to top Chinese brokerage Citic Securities (HKEx: 6030; Shanghai: 600030) is on the brink of collapse. London Stock Exchange Group has been looking to sell Russell for the last few months, and Citic had emerged as the preferred buyer after several others dropped out.
But Citic Securities has suddenly become a symbol of instability in China, hit by the one-two double whammy of corruption allegations and plunging profits for its core securities brokerage business. The recent corruption allegations against some of its top officials are part of a bigger national crackdown on graft, while the woes at its core brokerage business are the result of volatility in China’s stock markets. Read Full Post…
Bottom line: China’s gaming market remains stubbornly fragmented and unprofitable despite its huge potential, with no clear signs of much-needed consolidation coming anytime soon.
Gamers continue to struggle
As much of China bakes under a summer heatwave, a major trade show this week in Shanghai is casting a different spotlight on the overheated state of the nation’s gaming industry. One report is saying that only 2 percent of companies in the emerging mobile gaming space can generate big profits, and the situation may not improve anytime soon due to a stubborn state of fragmentation.
The problem has led many of China’s US-listed gaming companies to launch privatization drives over the last 2 years, including Giant Interactive, a large but decidedly second-tier player that de-listed a year ago. Giant’s talkative chief Shi Yuzhu is blaming US investors for failing to appreciate his company, with the latest reports saying he thinks Chinese stock buyers will value his firm at more than 5 times what it was worth when it de-listed from New York. Read Full Post…
Bottom line: Shanda’s participation in a bid for a US financial firm marks the start of the company’s move into finance, and reflects the broader rise of a new group of major private equity investors in Shanghai.
Shanda joins bid for US investment firm
Following its failed bid to become a major online entertainment company, the Shanghai-based Shanda is trying its hand at deal-making, with word that it’s part of a group making a bid for major US financial firm Russell Investments. Shanda’s entry to the private equity realm marks a growing trend that is seeing Shanghai-based companies emerge as some of China’s most aggressive homegrown private equity investors.
That trend is being led by Fosun International (HKEx: 656), which has been one of China’s biggest international buyers these last 2 years with a number of high-profile investments in Europe and North America. More recently Fosun has been joined by the aggressive China Media Group, which is connected to Shanghai’s leading media company SMG, and whose name is also showing up on a growing number of high profile investments. And then there’s the recently formed China Minsheng Investment Corp, an offshoot of the entrepreneurial China Minsheng Bank (HKEx: 1988; Shanghai: 600016), which is also being quite aggressive. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 11. To view a full article or story, click on the link next to the headline.
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Towers Watson, Shanda, Citic Vying for Russell Investments – Sources (English article)
Hunan TV’s Mango TV Raises 500 Mln Yuan, Valued At More Than 7 Bln Yuan (Chinese article)
Bottom line: WuXi PharmaTech’s privatization will be followed by at least 3-4 more similar buy-outs this year for US-traded Chinese stocks, including a 50-50 chance that Renren will attempt a privatization by mid-year.
Wuxi Pharma gets buy-out bid
I’m beginning to feel like I should start a betting list of Chinese candidates that may de-list from New York, following word that unappreciated drug maker WuXi PharmaTech (NYSE: WX) has become the latest company to announce a management-led buy-out. At the same time, dying social networking (SNS) site Renren(NYSE: RENN) has also announced results of its own recent Dutch auction-style share buyback plan, which also hints that it could become the next company to attempt a privatization. Read Full Post…
Bottom line: Sina stands a 50-50 chance of getting a takeover bid within the next year, as suitors eye it for its low valuation, well-respected name and controlling stake of Weibo.
Sina anticipating suitor?
Leading web portal Sina (Nasdaq: SINA) has become one of China’s perennial Internet underperformers, leading to occasional talk that it might become a takeover target for a larger, better-run peer. Now Sina has just announced its renewal of a “poison pill” plan designed to prevent such a hostile takeover. This particular move looks like a formality rather than indicator of a looming takeover bid, since Sina launched the original plan 10 years ago and perhaps it is now is now set to expire. But the fact that Sina is not only renewing the plan, but doing so in a very public way, indicates it may feel it could become a takeover target in the current hot climate for Chinese Internet M&A. Read Full Post…
Bottom line: Shanda Games is likely to close its privatization by next month, as group founder Chen Tianqiao finishes dismantling his entertainment empire to try a possible new career in private equity.
De-listing looms for Shanda Games
The long and tortured privatization Shanda Games (Nasdaq: GAME) could finally be near, with word that a group bidding for the faded online gaming giant has finalized its funding for a $1.9 billion buyout. If and when this buyout finally closes, it will mark the end of a privatization bid that began more than a year ago. That would easily make it the most drawn out such buyout among about a dozen major Chinese companies that have left New York over the last 2 years due to lack of interest from investors. Read Full Post…
Bottom line: New developments in the break-up of Shanda Group are likely to result in the successful sales of its games and literature units in the next 6 months.
Cloudary pools resources with Tencent literarture
The slow-motion break-up of former online entertainment superstar Shanda Group continues in 2 different headlines, with word that its core online literature and gaming businesses are set to be taken over by Internet giant Tencent (HKEx: 700) and a couple of major brokerages, respectively, in separate deals. Both of these deals look quite exciting, as they involve the entry of serious-looking buyers who could ultimately use their acquired Shanda assets to create some interesting and potentially competitive new companies in their respective spaces. Read Full Post…
