Grand Game step giant follows: Privatisation has a long way to run

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Sina Science and Technology Li Ho

At the Games industry summit in early January, some media asked if the current U.S. capital market is not recognized, forcing Chinese online gaming companies to take action on capital operations? Then CEO Zhang of the Grand game (6.5, 0.85,15.04%) holding the microphone, Immediately the hands of Mike stuffed to the side of the giant CEO Guixe hands, laughing said "This problem Ji always more have a say." Time came half a month later today, think of the Zhang can also be the Chinese online gaming companies to deal with the U.S. market test of various strategies in detail.

On the evening of 27th, Shanda announced that it had received a privatisation offer from a consortium led by the controlling shareholder, at a price of 1.9 billion dollars. At this time the Royal network (Shanda Game parent) announced the commencement of privatization, separated by 2 years 3 months.

Privatization is ready.

The essence of privatization is a merger. A listed company or a large shareholder of a company buys shares in the hands of other small shareholders and individual shareholders, turning the company into a "private" company by the stock exchange market and the "public" company held by all the shareholders, and eventually retire from the city.

According to the official Grand game statement, Shanda Interactive entertainment and spring Capital will be privatized by raising new shares and corporate bonds, and the two companies will buy all ads for Shanda games (US depository shares) at $6.9 a share, 22% higher than the Friday closing price of Shanda.

The recent rise in the share price of Shanda games should also be related to this. Since January 16 to January 24 (Friday), Shanda game has been the company Commander 6 trading days, the share price from 4.23 U.S. dollars up to 5.65 U.S. dollars, cumulative gain of 33.6%. After announcing the privatisation news, Shanda gaming stocks surged 12.39% to 6.35 dollars, with a market capitalisation of $1.718 billion trillion.

September 25, 2009, Shanda Game landed on Nasdaq, with 12.5 U.S. dollars per share issued 83.5 million shares in the United States Depository Shares (ADS), the market value of 1.04 billion U.S. dollars. But then the share price fell year by day, the lowest ever to 2.68 U.S. dollars, in July last year, due to hand tour "Million King Arthur," the successful issue of the stock price climbed to 6.25 U.S. dollars, but then quickly fell back to 4-5 U.S. dollars.

In fact, Chen flyover as early as six months ago for the Grand game privatization prepared. July 29, 2013 night, grand games to 811.5 million U.S. dollars price, from the Grand Interactive Entertainment acquisition of two subsidiaries: Shanghai Sheng Exhibition Network technology company and Tianjin Shengjing Trading Co., Ltd. These two companies are mainly responsible for user account management, payment channels, customer service and technical support, rather than two independent companies, as a game company indispensable two departments.

Trading, Shanda Game market value of 1.26 billion U.S. dollars, the initial IPO for 1.04 billion U.S. dollars, 800 million of dollars of acquisition price hollowed out a grand game. After stripping out the service Support unit, Shanda clears the barriers associated with transactions for potential buyers or privatization.

For sale or domestic listing

If the grand final completion of privatization, will become a giant after another active retreat of the city of the net share. November 25, 2013, the giant announced plans to buy 11.75 dollars per share of the price of repurchase shares to complete privatization.

Giants, Shanda announced privatization, once again confirmed: Although the current stock overseas market window period, but the model of Chinese online games is still not recognized, online games enterprises in the rapid cycle and scale, p/E and share prices have been falling. The cost of privatization may be more cost-effective than borrowing from banks.

But the domestic capital market's attention to the game theme has reached an unprecedented height. Compared with overseas earnings of less than 10 times times, the domestic multiples of the price-earnings ratio for Giants, Shanda, these companies more attractive, it is difficult to say Shanda did not move the domestic market mind. Previous sources said that the giant network will be privatized after the transfer to the domestic or Hong Kong to go back to market.

According to other people familiar with the situation, the previous Grand game had contact with 360, but in the end there was no substantive results. Analysts pointed out that Shanda games after the privatization of the possibility of packaging, but given the volume of Shanda games and the difficulty of integration, it may be difficult to have a company.

In addition, as early as 2011 Grand Chairman Chen has been interested in applying for Shanda game domestic listing, but the premise is that the Shanghai Stock Exchange International Board in place.