Shanda agrees to go private

    CHINESE online game developer Shanda Games Ltd. has agreed to be taken private by Capitalhold Ltd. and its unit Capitalcorp Ltd. in a deal valued at US$1.9 billion.

    Capitalhold will pay US$3.55 per ordinary share and US$7.10 per American Depositary Share for Shanda, which is at a premium of 46.5 percent to Shanda’s 30-day average trading price. In September, private equity firms Carlyle Group and Fountainvest Partners pulled out of the consortium backing the bid to buy Shanda Games, raising doubts over the future of an up to US$850 million leveraged buyout loan that was being raised from banks to back the buyout. China online game developer Perfect World Co. and China-focused private equity firm Primavera Capital also exited the consortium.

    Erzhong’s owner fails to buy enough shares

    LOSS-MAKING Chinese equipment manufacturer Erzhong Heavy Industries’ owner has failed to buy back enough shares in the company to take it private, a filing to the Shanghai Stock Exchange showed Friday.

    Erzhong had been set to become the first firm to voluntarily delist from the Shanghai exchange since the introduction of stricter listing rules, in a further sign that tougher regulation is driving speculators out of loss-making stocks. However, its owner, China National Machinery Industry Co. (Sinomach), only managed to buy 112.6 million shares from 12,759 investors as of April 3 in a tender offer, Erzhong said. Sinomach had to buy at least 172 million shares for the tender offer to go through, according to calculations based on the offer conditions announced in February.