Management, private equity firms jointly bid $3.5 bn for China’s Focus Media

A consortium led by the management and private equity firms have offered to acquire China's largest display-advertising provider Focus Media Holding Ltd, in a deal that values the Nasdaq-listed company at $3.5 billion.

Focus Media's chairman and CEO Jason Nanchun Jiang who owns about 18 per cent stake, Carlyle Group, FountainVest Partners, CITIC Capital Partners, CDH Investments and China Everbright are part of the consortium that are proposing to take the Shanghai-based display-advertising firm private.

The consortium has offered to pay $27 in cash per American depositary share (or $5.40 in cash per ordinary share), a premium of 16 per cent to the company's closing price on 10 August, valuing Focus Media at around $3.5 billion.
 
According to the proposal, the consortium members will form a special purpose vehicle for acquiring Focus Media, which would be financed with a combination of debt and equity capital.

The consortium members are confident that Citigroup Global Markets Asia, Credit Suisse and DBS Bank will finance the deal.

Founded in 2003, Focus Media operates China's largest lifestyle targeted interactive digital media network. The company offers liquid crystal display (LCD) network using audiovisual digital displays at several outdoor sites in China.

Focus Media operates around 170,000 flat-panel displays in about 90,500 commercial buildings covering over 90 cities, while its in-store network targets shoppers through 49,000 flat panel displays installed in more than 2,700 hypermarkets, supermarkets and convenience stores in China.

Focus Media has made several acquisitions, prominent among them are the 2005 purchase of Framedia, operator of the largest in-elevator poster frame advertising network in China and the 2006 acquisition of ACL, an advertiser in more than 1,700 movie screens at more than 280 movie theatres and throughout China.