The road to privatization of Jiangnan spring is not as flat as imagined

Absrtact: Even if the capital is known for its operation, the road to privatization of Jiangnan spring is not as flat as imagined. A few days ago, a source revealed that the original force of the public privatization of the five major investors, Ding-hui investment has withdrawn from the consortium. Affected by this message, December 7,

Even if the capital is known for its operation, the road to privatization of Jiangnan spring is not as flat as imagined.

A few days ago, a source revealed that the original force of the public privatization of the five major investors, Ding-hui investment has withdrawn from the consortium. Affected by the news, December 7, the media (NSDQ:FMCN) has fallen by about 6% per cent, the highest decline since September.

August 2012, the media announced to the public, the Chairman of the Jason United Square Source Capital, Carlyle Group, Citic Capital, CDH Investment, China Everbright Holdings and other five investors submitted a proposal for privatization, to 27 U.S. dollars per share of the company to privatize, this is also following Alibaba, grand, large in the stock company once again privatized.

At the moment, the most immediate effect of the CDH exit is to postpone the timetable for the privatization of the niche.

Ding Hui "worry"

In accordance with the Jason and the consortium's offer, the plan is to pay $27 in cash for each depository voucher. This price is 15.5% higher than that of the media close to August 10, which is equivalent to $5.4 per share of common stock. At this price, the total valuation is USD 3.49 billion.

As the focus of the early investors, Ding-hui the departure of the field caused a lot of speculation outside.

April 2004, the Ding Hui international United States well-known investment fund DFJ, the Victoria Investment Company and several investment companies to the distribution joint capital injection of 12.5 million of dollars. The investment was crucial to the niche, and since then its network of commercial buildings in China has grown from 3000 to tens of thousands to become the market leader. According to data shows, ding-Hui has through its founder Wu shareholding 7.86%, 2007 after the successful listing of the exit. In the industry's view, PE profit-driven, arbitrage. If the privatization is properly operated, it is a good choice for both sides to have a new stake in the CDH. FountainVest, Ding Hui and other PE through the provision of funds to obtain the corresponding equity. Once the media is back on the market, PE can be sold out from the level two.

In response to the Ding Hui exit, the reporter to the media Department of Public Relations relevant people to verify, it said that the field did not receive the ding-hui news, the audience will not comment on the matter.

According to the said, the process of the privatization of the public is still continuing, "the final assessment of the Independent board committee has not yet come out". Reporters call Ding Hui Shanghai office, but no one responded.

According to the reporter understands, the ding Hui aspect exits the transaction, obviously has own consideration. A person familiar with the situation said that CDH had planned to invest about $200 million trillion, but felt that the investment did not bring a good return and decided to withdraw. And close to the people of the Ding Hui to the "China Business newspaper," the reporter revealed that the real concern of the Ding Hui is "that after privatization of PE exit channel too little, investment return is not too optimistic." In fact, before the Ding Hui also showed a subtle attitude of the second largest shareholder of the media to revive the international, for the distribution of private offer, Renaissance international evaluation at the time is "attractive choice", the premise is to achieve shareholder value first.

On the impact of the matter, Chinaventure Group senior analyst Feng Po that "it is not clear that Ding Hui in the offer of the specific share of limited share of the impact of limited". However, in the industry's view, the lack of confidence in the Ding Hui will undoubtedly bring some negative effects, and the change of the most direct impact, it is likely to lengthen the process of privatization of the public sector.

Jiangnan Spring Style

As the soul of the congregation, Jason is clearly the key to the eventual success of privatization. There have been many speculations about the motives behind the privatization of the public. The official interpretation of the audience is mainly focused on the low period of the valuation of the stocks and the long-term strategic considerations. Review of the growth of the history of the public, it seems that the Jiangnan spring from the previous capital options for privatization after the point of view to find some traces.

October 2005, the majority of the 183 million U.S. dollar price acquisition framework Media 100% start, and gradually launched a series of core business-oriented expansion and acquisition. In addition, the audience also launched a large number of non-core business acquisitions, when Lang Ping on this has been a comment: "Diversification of the division into a fatal crisis." "2009 comeback after the Jiangnan spring, then a capital Madman's intrepid style, after a series of restructuring and peeling, to help the audience back on track."

From the massive expansion of capital to stripping redundancy, the style of the Jiangnan spring is changing, from adding to subtracting. And after many subtraction, Jiangnan spring shows the strongest desire, mainly focused on the network interactive advertising business. Jason once push Q card, try to put Q card and the audience interactive screen to create the whole China's largest promotional preferential information interactive communication platform. But according to the media in the 1th quarter of 2012 reported that Q card registered users of about 2.8 million, active users accounted for 20%~25%, while in the 2 quarter and 3 quarters, this number has not marked progress. This obviously did not reach Jiangnan Spring "interactive revolution" depth. August 2012, the O2O and poly-cost cooperation, test water marketing. Try to push through the audience interactive screen to send a poly-cost and promotional two-dimensional code, the user through the Alipay client scan purchase. But the attempt so far does not seem to have made a substantial breakthrough. According to the media in the 3rd quarter of 2012, the media framework advertising business revenue continued to maintain a relatively large increase in contribution to 31.8%. The advertising growth of the media has continued to be driven by the revenue growth of the framework advertising.

"After privatization, the IPO of a or H-shares is a choice for the audience." "But it is more important that the Feng Po may make a series of adjustments in the business, which will doubtless revolve around the mobile sector," he said. Even with the current bottleneck in the interactive screen, Jason is clearly continuing to explore this.

In addition, the privatization of the public is still surging in the stock market trend. Data show that 2012 to date, the U.S. listing announced privatization of the Chinese enterprises have reached 21. In Feng Po's view, "privatisation is good for delivering confidence to investors, but some companies are aiming to signal a boost in prices in the short term." "In any case, privatization is not a good way to go, variables and risks coexist, some people pass and some die."