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Focus Media Holding (FMCN) To Be Taken Private For $3.7B

 December 19, 2012 02:30 PM

(By Balaseshan) Focus Media Holding Ltd. (NASDAQ: FMCN), which operates liquid crystal display (LCD) display network in China, said it has agreed to be bought by Giovanna Parent Ltd. in a going private transaction for about $3.7 billion.

Focus Media has entered into a definitive Agreement and Plan of Merger with Giovanna Parent and Giovanna Acquisition Ltd. Giovanna Parent will acquire Focus Media for $5.50 per ordinary share or $27.50 per American depositary share, each representing five shares, a 15% premium to Focus Media's previous close.

Giovanna Acquisition will merge with and into Focus Media, with the company continuing as the surviving corporation and a wholly-owned subsidiary of Giovanna Parent.

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The company's board, acting upon the unanimous recommendation of an independent committee, approved the transaction and resolved to recommend its shareholders vote to authorize and approve.

The company is not permitted to pay any dividends or repurchase any of its shares pending consummation of the transaction. As a result, the company's board has suspended its previously announced share repurchase program and dividend policy.

The transaction is currently expected to close during the second quarter of 2013. If completed, the transaction will result in Focus Media becoming a privately-held company and its ADSs will no longer be listed on the NASDAQ Global Market.

Certain financial institutions have agreed as underwriters, bookrunners and/or mandated lead arrangers to arrange and/or provide or underwrite $1.525 billion in the aggregate of debt financing for the transaction, subject to certain conditions.

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FMCN is trading up 7.74% at $25.76 on Wednesday. The stock has been trading between $16.80 and $30.08 for the past 52 weeks.

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