Chen to launch a grand privatisation: an internal or a series of adjustments

Source: Internet
Author: User
Liu Fangyuan since the Nasdaq listing in 2004, Shanda Network (Nasdaq:snda) ushered in its "seven-year itch." On the evening of October 17, the Grand network announced that the board had received a preliminary, non-binding letter of recommendation from the Chairman of the board, CEO and President Chen on October 15.  In the letter of recommendation, Chen offered to buy all issued shares in cash, in addition to the shares held by him and his family. As of September 30, 2011, Chen, Luo Qianqian (Chen wife), Danian (Chen flyover brother, Grand COO) held a grand share of the shares of about 68.4% (except the issued options).  It is reported that Chen flyover has been talks with JPMorgan Chase, will be borrowed to the latter to raise the acquisition of funds. October 18, the Royal Network spokesman said the privatization of the move shows the big shareholder Chen to the grand confidence, but also for the long-term development of the company.  There is no clear message as to the planning after the grand privatisation and the direction of the next development. It is reported that the Grand Board of Directors has formally established a special committee composed of independent directors, the Special Committee has not yet made feedback on privatization programmes. Investment bank analysts generally believe that the grand Internet privatization is likely to be a big deal.  Affected by the news, the grand opening rose to 38.01 U.S. dollars, eventually closed to 38.33 U.S. dollars.  The possibility of the return of a shares in the Chinese concept stocks are collectively underestimated, "VIE structure" was questioned legality, overseas financial markets continued to be depressed moment, the grand retreat of the city also has a variety of interpretations. There is a view that Shanda can solve the historical problem of vie. It has also been pointed out that privatization is a more "radical" way of proving its worth than repurchase because of its long term undervaluation.  Another common interpretation is that Shanda is doing it to pave the way for the eventual return of a A-share.  As a grand controller, Chen himself as a member of the CPPCC for many years in the national two sessions to promote the "red chips return" proposal. For example, in the proposal submitted this year, Chen pointed out that overseas listing is actually not a grand intention. "Due to the past investment and financing system is not perfect, leading to such as Shanda, Sina, Sohu and other large number of innovative enterprises are selected in the United States rather than the A-share market listing."  "Chen that although international venture capital has played a very important role in the growth and maturation of Chinese innovative enterprises, at the same time, due to the need of the venture capital fund exit mechanism, when these enterprises accept the venture capital, they have made the relevant architectural arrangement and promise: It is listed in the international capital market outside China. Chen described the Chinese concept stock as an "orphan stock" because the market and the users were in China, and investors were abroad. "The reason why a large number of innovative enterprises are listed abroad is the objective environment and not necessarily the subjective desire." "In fact, the grand P/E ratioThe companies listed in the U.S. are not bad. "After removing the cash, the Shanda network has a price-to-earnings ratio of about 20 times times."  According to the statistics of Roche Securities, as of Friday, the majority of the mainstream of the stock price-earnings ratio of less than 7 times times. "So the announcement that Chen flyover hopes to privatize is indeed a bit unexpected."  "It is expected that Shanda is likely to be listed again on another exchange because it has previously said that it is considering listing on the Shanghai Stock Exchange and that US investors do not fully understand the grand business strategy."  Ecapital Capital CEO Ran (Weibo) also points out that Shanda may have a parallel family-holding platform within its borders, and two holding companies are not listed, but after the exit, some assets (such as those related to cultural industries) are lifted and then listed in the territory via IPOs or shell-buying.  The beginning of a big adjustment? Aside from the grand return of a shares of speculation, there are familiar with the grand people pointed out that the privatization of the practice of combing the grand business itself also has a role, "next is likely to be a series of grand internal adjustment of the beginning of the operation."  And the idea of such adjustments and privatisation may have been brewing early this year. According to Roche Securities, a total of 400 million dollars were spent on last year's repurchase and less than 20 million in the first half of the year, even though the average share price this year was lower than last year.  It is likely that Chen has already sprouted the idea of grand privatisation. In fact, Chen Tianqiao for its "interactive entertainment" dream, has been seeking a diversified layout.  In addition to the larger field of network games, has been in music, literature, film and video and other aspects have specialized subsidiaries, such as Shanda literature (microblogging), cool six media. In addition, the recent grand and intensively launched a lot of mobile internet direction related to new products such as "Cut off", "push him" and so on. A person familiar with the matter said that the Royal Department's current large and small companies estimated to have more than 200, "there are a large number of companies are not zoned in the Royal network listed companies." "The person believes that privatization will be more conducive to Chen for all of its business to reorganize the layout."  There is also a big possibility is that the royal network after the privatization of the holding company does not go public, the new business of its packaging and integration after a separate listing. As a listed company, in order to produce good earnings in the operation will have a lot of restrictions. In fact, the recent earnings of Shanda networks have been heavily dragged down by diversification.  According to Sheng released in the second quarter of 2011, the net profit for the second quarter of the Grand network was 8.8 million yuan, down 94.35% year-on-year, down 89.39%. For the grand approach, Jinshan software (micro-BO) Chairman of the LEI (micro-Bo) also said: "Shanda has several listed companies, there is no shortage of financing channels." If the parent company succeeds in privatizing, there is no stock market or public pressure to do something big. "Share to:
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