China's Shanda Interactive to be taken private by Tianqiao Chen family

Online gaming and entertainment company Shanda Interactive Entertainment yesterday said that it has agreed to be taken private by a consortium led by its Chairman and CEO Tianqiao Chen in a deal that values the Chinese firm at $2.3 billion.

The consortium comprising Tianqiao Chen, his wife Qianqian Luo, a non-executive director of Shanda and brother Danian Chen, the chief operating officer, together holding 69.7-per cent stake in Shanda, has offered $41.35 each in cash for the American depositary shares they do not already own, a premium of 24 per cent to its price in mid-October when the bid was first made public. (See: China's Shanda Interactive receives $740-mn management buyout offer)

The offer has been made through their transaction vehicle Premium Lead Company Ltd and New Era Investment Holding Ltd, which is being financed with a $180-million loan from J P Morgan Chase Bank and cash contribution from the buyers.

The transaction, which is expected to close before the end of the first quarter 2012, has been unanimous recommended by the Special Committee of Independent Directors unrelated to the buyers.

Shanghai-based Shanda Interactive is China's best-known gaming and entertainment company offering a broad array of online entertainment content on an integrated service platform to a large and diverse user base.

Shanda offers its entertainment content through its subsidiaries and affiliates, including Shanda Games, Cloudary, Ku6 Media, and various other online community and business units.