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Focus Media To Go Private In $3.7 Bln. Deal - Update

12/19/2012 3:42 PM ET

Chinese digital advertiser Focus Media Holding Ltd. (FMCN: Quote) Wednesday agreed to be taken private by a consortium of private equities, including The Carlyle Group (CG: Quote) and the company's CEO Jason Nanchun Jiang, in a sweetened offer for $27.50 per American depositary share.

The offer represents a premium of 17.6 percent over Focus Media's closing price on August 10 - the last trading day before initial news of a going-private proposal emerged.

The deal, which values Focus Media's equity at about $3.7 billion, is expected to close in the second quarter 2013.

The $27.50 per ADS offer is fifty cents more than what the consortium offered in August. Apart from Carlyle and CEO Jiang, the consortium includes China-based FountainVest Partners, CITIC Capital Partners, CDH Investments and China Everbright Ltd.

Focus Media said its Board has approved the deal, which is subject to closing conditions, including that the deal be approved by shareholders representing two-thirds or more of the shares.

Focus Media is not permitted to pay any dividends or repurchase any of its shares pending consummation of the deal and as a result, the company has suspended its previously announced share repurchase program and dividend policy.

Last month, Focus Media reported a better-than-expected rise in quarterly profit, on growth in LCD display and other network platforms. However, it detailed a weak outlook for the fourth quarter, on fears of weak Chinese macroeconomic conditions impacting advertising spending.

Focus Media is trading at $25.68, up 7.40%, on a volume of 6.4 million shares on the Nasdaq.

Carlyle is trading at $26.10, down 0.65%.

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by RTT Staff Writer

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