ALM Properties, Inc.
Page printed from: The Asian Lawyer
Select 'Print' in your browser menu to print this document.
Six Firms Lead on $3.7 Billion Focus Media Buyout
The Asian Lawyer
Updated, 12/20/12: This story was first published in August and has been updated to note Focus Media's approval of a $3.7 billion buyout offer, as well as to include the roles of Kirkland & Ellis and Ropes & Gray in the transaction.
Chinese digital advertising company Focus Media Holding Ltd. has agreed to a $3.7 billion buyout offer from a consortium of investors that includes chief executive officer Jason Jiang and private equity giant The Carlyle Group.
If shareholders approve the buyout, the deal will result in the largest-ever de-listing of a Chinese company from a U.S. exchange.
The Asian Lawyer in August reported that Skadden, Arps, Slate, Meagher & Flom; Sullivan & Cromwell; Fried, Frank, Harris, Shriver & Jacobson; and Simpson Thacher & Bartlett are advising on the deal, which also included private equity groups FountainVest Partners, CITIC Capital Partners, CDH Investments and China Everbright Ltd.* CDH Investments has since dropped out of the consortium, according to a Dec. 7 Dow Jones report.
Kirkland & Ellis is also involved in the deal, according to a statement from Focus media. The firm is advising the independent committee of Focus Media's board of directors, which negotiated the terms of the buyout.
The Shanghai-based Focus Media, which operates a network of video screens targeting consumers in public spaces and commercial buildings, announced on Wednesday that its board of directors had voted to approve the buyout. The transaction still needs the approval of two-thirds of the company's shareholders, but is expected to close by the second quarter of 2013.
Focus Media listed in the U.S. on the Nasdaq Stock Market in 2005. Such "take-private" transactions have grown more common in recent years as Chinese companies have increasingly chafed at the compliance costs, regulatory scrutiny and litigation risk that attend U.S. listings.
Focus itself is currently the target of U.S. shareholder litigation over the stock-price drop that followed short-selling group Muddy Waters' November 2011 release of a report accusing the Chinese company of overstating the number of video displays it operated. The company has denied the Muddy Waters claims.
Skadden Beijing partners Peter Huang and Michael Gisser are advising Jiang.
The other members of the consortium are being represented by Sullivan & Cromwell Hong Kong partners William Chua and Michael DeSombre and Fried Frank Hong Kong partners Douglas Freeman and Victor Chen, New York partner William McGuinness, and Washington, D.C. partner Kevin Harnisch. Sullivan & Cromwell was lead counsel for the consortium on the financing for the transaction, a firm spokesman said. Ropes & Gray partner Gary Li, also in Hong Kong, is acting for China Everbright.
Simpson Thacher is advising Focus Media, with Hong Kong partners Kathryn Sudol, Chris Lin, and Daniel Fertig leading work on the deal. Zhong Lun Law Firm is acting as Chinese counsel and Conyers, Dill & Pearman as Cayman Islands legal counsel for Focus Media.
Kirkland & Ellis Hong Kong partners David Zhang, Jesse Sheley and Stephanie Tang are acting for Focus Media's independent committee. Maples and Calder and Fangda Partners Shanghai partner Michael Qi and Beijing partner Ma Chen are serving as Cayman Islands and PRC legal advisors to the independent committee, respectively. Shearman & Sterling Hong Kong partner Paul Strecker is acting for J.P. Morgan Securities (Asia Pacific) Ltd. as financial advisor to the independent committee.
The buyers will finance part of the transaction through a $1.53 billion loan, with a group of 11 banks serving as underwriters, bookrunners, and lead arrangers. Bank of America, China Development Bank Corp., Credit Suisse AG, and UBS AG are among the banks involved in the financing. The group is being represented by Clifford Chance Hong Kong partner Anthony Wang, London partner Michael Dakin, and New York partner Chris Morvillo. Walkers Hong Kong partners partners Andy Randall, Ashley Davies, and Arwel Lewis and Fangda Partners Shanghai partner Xie Zheng and Beijing partner Ma Chen are serving as Cayman Islands legal advisor and PRC legal advisor, respectively, to the underwriters, bookrunners and mandated lead arrangers of the debt financing
*Updated, 9/17/12: The original version of this story has been updated to note the role of Sullivan & Cromwell.
*Updated, 12/21/12: This story has been amended to include the roles of Clifford Chance, Shearman & Sterling, Fangda Partners, Maples and Calder, and Walkers in the transaction.
Additional reporting by Tom Brennan.