Bottom line: Perfect World’s de-listing plan is likely to succeed and could be followed by a merger with Shanda or Giant Interactive, while Renren is likely to also get bought out and de-list by the end of the year.
Perfect World gets buyout offer
Perfect World (Nasdaq: PWRD) has become the latest US-listed online game operator to decide it’s unappreciated by shareholders, announcing a plan to privatize and de-list its shares from New York. The management-led buyout offer shouldn’t come as a surprise, as it follows a steady stream of similar moves that has seen peers like Giant Interactive and Shanda Games (Nasdaq: GAME) also leave or prepare to leave the market.
At the same time, another headline from struggling social networking site (SNS) Renren (NYSE: RENN) is fueling speculation of a similar imminent de-listing. That news has Renren announcing the resignation of its CFO — news which should normally have a neutral to negative effect on the company’s stock. But in this case the stock has jumped on the news, indicating investors may think a buy-out offer is coming. Read Full Post…
Two more US-traded Chinese firms are on the cusp of de-listing, with online game operator Giant Interactive (NYSE: GA) and chipmaker RDA Microelectronics (NYSE: RDA) just announcing they have wrapped up buy-out deals that will pave the way for their imminent privatization. These 2 de-listing stories were announced months ago and are completely expected. But the bigger underlying story is the lack of major new privatization announcements in the last half year. In a similar development, major new IPOs by Chinese firms in New York have slowed considerably since a boom of offerings in April and May, indicating the broader deal-making market may be entering a new, more stable phase. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 19-21. To view a full article or story, click on the link next to the headline.
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Forbes Media Sells Off Most Of Company To HK Investor Group (Chinese article)
Paipai Re-launch to Bring JD.com (Nasdaq: JD) Experience to C2C (PRNewswire)
SouFun (NYSE: SFUN) Announces 5-Year Plan with a New Flagship Website Fang.com (PRNewswire)
SCA And Vinda To Integrate Hygiene Business In China (Businesswire)
Separate reports about a new IPO by one company and potential exit from the Nasdaq by another are reflecting the mixed feelings that Chinese firms have for New York, where public listings can bring both prestige and also headaches. In the new listing category, media are reporting that yet another mobile game developer called iDreamSky has just made its first public filing for a New York IPO to raise up to $110 million. Meantime, other media are reporting that veteran online travel service eLong (Nasdaq: LONG) could be gearing up for a buy-out by much larger rival Ctrip (Nasdaq: CTRP). Read Full Post…
Another US-traded Chinese online game firm could be headed for de-listing, after shares of China Mobile Games (Nasdaq: CMGE) tanked on reports of a major bribery scandal. China Mobile Games’ woes are just the latest in a growing list for US-traded online game makers, which have earned the official title of “no respect” from Wall Street investors. Two of the sector’s biggest players, Shanda Games (Nasdaq: GAME) and Giant Interactive (NYSE: GA), are in the process of privatizing, and I wouldn’t be surprised to see a buyout offer emerge for China Mobile Games following this new scandal. Read Full Post…
Hong Kong has always been a distant second to New York for Chinese technology stocks, which prefer more mature US investors to a less predictable environment in Asia. But the market could be quietly gaining some important momentum in the gaming space, with word of 2 new listing plans from the sector. The first of those has game developer Ourgame filing for a listing to raise up to 750 million yuan ($120 million) in Hong Kong, while the latter has media reporting that privatizing Giant Interactive (NYSE: GA) may also be eying a listing in the former British colony. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 17. To view a full article or story, click on the link next to the headline.
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The online game industry has just gotten a small hint of potential consolidation, with word that mid-sized player Perfect World (Nasdaq: PWRD) is buying a stake of rival Shanda Games (Nasdaq: GAME), which is in the process of privatizing. The tie-up that will see Perfect World buy about 6 percent of Shanda Games’ shares comes as both companies confront sagging profits, and could kick off a period of consolidation for the highly fragmented industry. I’ve incorrectly predicted such consolidation before, but a recent wave of M&A in China’s Internet and other recent trends could mean that such an overhaul could finally be coming to online games. Read Full Post…
An interesting new player may soon be coming to China’s crowded and highly fragmented private equity scene, with word that a major company has been set up by a group of leading entrepreneurs in Beijing and Shanghai. The company has a hefty 50 billion yuan in investment, equating to $8 billion. The player would be an important addition to China’s fast emerging field of major private equity firms, most of which are headed by entrepreneurial chiefs who are increasingly looking abroad for good investments. Read Full Post…
China Internet titans should consider stepping down
Web portal Sohu.com (Nasdaq: SOHU) was in the headlines last week as founder and longtime chief executive Charles Zhang discussed a major restructuring for one of China’s oldest Internet companies to ensure its long-term survival. (Chinese article) His disclosure put Sohu alongside most of China’s other major Internet companies in announcing such plans, as each seeks to chart a new course in a rapidly changing environment. Read Full Post…
The ongoing cleanup of neglected Chinese firms from US stock exchanges continues, with word that online game developer Giant Interactive (NYSE: GA) has finalized its plan to go private. A report on the bid says that several other Chinese online game firms are also planning privatizations, as former industry leader Shanda Games (Nasdaq: GAME) is also in the midst of its own such bid. It’s not hard to see why these companies are going private, as their shares have gone nowhere for years due to anemic growth. But what’s interesting here is the prospect that some of the private equity firms funding this wave of buy-outs could finally force a few of these companies to merge and create a more vibrant major new player with real growth potential. Read Full Post…
