Chinese online game publisher Shanda gets $1.9B offer to go private

Shanghai’s Shanda Games received a $1.9 billion buyout offer from its major shareholders, who want to take the online game company private.

Publicly traded Shanda makes things such the free-to-play multiplayer online role-playing game World Zero. The company is one of a number of large public game companies with a focus on the Chinese online market. And it’s part of a financial trend: rival game publisher Giant Interactive Group also received an offer from its chairman Yuzhu Shi in November to go private at a valuation of $2.8 billion.

The company said it received a proposal from its controlling shareholder, Shanda Interactive Entertainment Ltd., an affiliate of Primavera Capital, to take the company private for $3.45 a share for class A shares, or $6.90 a share per American depositary share. That amounts to $1.9 billion, or a premium of 21.3 percent to the company’s American depositary shares in the U.S.

The consortium’s members already own 76.2 percent of the company’s shares. It plans to finance the deal with a combination of equity and third-party debt. The company said its board will form a committee of independent directors to evaluate the proposal.

As of today, the Consortium members beneficially owned, in the aggregate, approximately 76.2 perecent of the company’s outstanding shares. Shanda’s stock price has risen 83 percent in the past year, and shares are up 12 percent today to $6.34 in ADS trading.