PEKING (dpa-AFX) - Shanda Interactive Entertainment Ltd. (SNDA) said it has entered into an Agreement and Plan of Merger with Premium Lead Co. Ltd. and New Era Investment Holding Ltd. pursuant to which Premium Lead will acquire Shanda for $20.675 per ordinary share or $41.35 per American Depositary Share, each representing two ordinary shares.
This represents a 26.6% premium over the company's 30 trading day volume-weighted average price as quoted by NASDAQ on October 14, 2011, the last trading day prior to the company's announcement on October 17, 2011 that it had received a 'going private' proposal.
The Transaction values Shanda's equity at approximately $2.3 billion on a fully diluted basis.
Pursuant to the Merger deal, upon the terms and subject to the conditions thereof, at the effective time of the merger, New Era Investment will be merged with and into Shanda, Shanda will become a wholly-owned subsidiary of Premium Lead.
Premium Lead Co. is a British Virgin Islands business company jointly owned by Tianqiao Chen, Chairman of the Board, Chief Executive Officer and President of Shanda, his wife Qian Qian Chrissy Luo, who is a non-executive director of Shanda and his brother Danian Chen, who is the Chief Operating Officer and a director of Shanda, together, 'Buyer Group'.
The Buyer Group collectively beneficially owns approximately 69.7% of the outstanding shares of the Shanda and intends to fund the transaction through a combination of proceeds from a loan facility in the amount of $180 million from JPMorgan Chase Bank, N.A., cash in the Company and its subsidiaries, and a cash contribution from the Buyer Group.
The Transaction is currently expected to close before the end of the first quarter 2012. If completed, the Transaction will result in Shanda becoming a privately-held company and its ADSs will no longer be listed on the NASDAQ Global Select Market.
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© 2011 AFX News
