Shanda Says Primavera, Carlyle Pull Out of Take-Private BidJonathan Browning and Foster Wong
Shanda Games Ltd. said private equity funds Primavera Capital Ltd., Carlyle Group LP and FountainVest Partners Co. have withdrawn from an offer to take the Chinese online game developer private.
An affiliate of Haitong Securities Co., China’s second-biggest listed brokerage, and Ningxia Zhongyincashmere International Group Co. replaced the buyout firms, Shanda Games said in a PR Newswire statement dated yesterday. The terms of the offer, which valued the company at $1.9 billion, remain unchanged, Shanda Games said.
Shanghai-based Shanda Games received an acquisition offer from its parent company and Primavera, which together owned a 76 percent stake, in January. Carlyle and FountainVest Partners later separately agreed to invest in Shanda Games as part of the transaction.
Shares of Shanda Games fell 2.3 percent to $6.28 yesterday, the steepest decline since January. The stock is trading 9 percent below the group’s offer of $6.90 per American depositary share.
The bidding group led by Shanda Interactive Entertainment Ltd. has shelved plans to borrow as much as $850 million through a syndicated loan facility to fund the buyout, two people familiar with the offering said today. They asked not to be identified because they’re not authorized to speak publicly.
An affiliate of Orient Securities Co. will also join the bidding group, according to yesterday’s statement.
Zhongyincashmere International is the largest shareholder of Shenzhen-listed Ningxia Zhongyin Cashmere Co., which says it is the world’s biggest producer of products made from the fine wool, according to its website. The listed arm also owns 147-year-old Scottish yarn mill Todd & Duncan Ltd., a supplier to brands including Prada SpA, the website shows.
Shares of Zhongyin Cashmere have been halted from trading since Aug. 25, as the company is in talks with various parties about an unspecified important matter, according to an exchange filing.
Shanda Interactive’s Shanghai-based spokesmen weren’t available for comment after three phone calls today.