Giant Interactive to be bought out for US$3 billion by its chairman

The firm to be sold to a consortium led by Chairman Yuzhu Shi and private equity companies Baring Private Equity Asia, Hony Capital of China

GiantInteractive

After Giant Interactive’s stellar performance in its 2013 financial results, it is planning to go private and delist itself from the New York Stock Exchange, seven years on from its initial listing in 2007.

It is going to be bought out for US$3 billion by a consortium led by the company’s Chairman, Yuzhu Shi, and private equity companies Baring Private Equity Asia, as well as Hony Capital of China.

The group behind the deal owns approximately 49.3 per cent of Giant Interactive’s stock currently. Investigations by Levi & Korsinsky are taking place to identify if the consortium is taking advantage of its position as the company’s chief shareholders in order to purchase the company at an unfair price of US$12 per share. This is 3.5 per cent above the market rate of 11.59 currently. According to Bloomberg, shares of Shanghai-based Giant Interactive have risen 81 per cent in the past year.

Read Also: China’s anti-gaming addiction measures not effective

Why would Giant Interactive delist itself from NASDAQ? According to Echo He, an analyst with Maxim Group, some Chinese online gaming companies think their value has been underestimated in the US as investors favour mobile gaming companies compared to PC gaming.

Giant Interactive is best-known for its online games, for example, the ZT online franchise and World and Xianxia. This deal ranks as the second-biggest deal for a Chinese company after the US$3.8 billion privatisation of Focus Media in 2013, which was acquired similarly as Giant Interactive by its Chairman.

Theon Leong

Theon is a skeptic who believes in possibilities after learning that three thirds of a pie does not add up to one and that cats can be dead and alive at the same time. He writes about business and technology, and is particularly interested in deconstructing complex ideas into bite-sized chunks. His favorite novel is The Little Prince, and spends his free time on chess and video games.

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