Focus Media has reached an agreement with Silver Lake (a global private equity investment fund Silver Lake Investment Group), a private equity investment fund, and Focus Media will sell its equity in Hoyer Network Holdings Limited and its subsidiaries to Silver Lake.
According to the agreement, Silver Lake will pay US $ 124 million in cash for Focus Media in exchange for the 62% stake in Focus Media held by Focus Media. Therefore, after the completion of the above series of transactions, Silver Lake will have an absolute controlling interest in Haoye.
"We very much welcome Silver Lake to become our controlling shareholder and strategic partner," said Haoye CEO Zhu Hailong. "Hoyye hopes to take advantage of Silver Lake's deep technical background and outstanding insight into the global interactive media market. Continue to innovate and grow our business model. "
"Now Haoye's growth has entered a new period. We believe that Silver Lake, as an investment expert in the technology field, can well support Haoye's further development of its technical advantages and competitive advantages in China's Internet advertising market. In the future, it will also focus more on its core business and expand the influence of media groups such as buildings, stores, and frameworks in life circles to a deeper and larger scale. "Jiang Nanchun, chairman and CEO of Focus Media, said.
Industry insiders expressed different views on the sale. Internet veteran Xie Wen commented on the acquisition that it was a poor operation of Focus. “Finance itself has been reduced to a bad company. It was bought back at a high price. If you ca n’t continue to operate, you have to sell at a loss. â€Xie Wen also emphasized that the exchange rate of the US dollar and the RMB bought before was about 1: 8, and now about 1: 5. It can be said that the conversion to RMB is even worse.
Internet expert Liu Xingliang believes that Focus's move is very cost-effective, which will have a negative impact on Focus and even drag down its stock price. He said that on the one hand, Haoye belongs to new media advertising and is a high-quality asset of Focus. It is more promising than Focus ’s core businesses such as building LCD network, store network, and poster framework. On the other hand, from the price point of view, the price of Focus sold this time is lower than that acquired at the time. "Finance was preparing to plan for the independent listing of Ye, but now it is sold at almost a loss. It is very incredible, and I don't understand Jiang Nanchun's intentions."
In March 2007, Focus Media acquired all the shares of Haoye with USD 70 million in cash and USD 155 million of Focus Media common stock (two sums of USD 225 million). This time it sold a 62% stake in Haoye for $ 124 million.
If calculated at the purchase price of 225 million US dollars, the 62% equity of Haoye is worth 1.39 US dollars, and this time the Focus Group sold 124 million yuan, not including the current exchange rate adjustment. According to this reasoning, this time the focus is on selling at a loss.
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