Focus takeover: Sina CEO still hopeful as deadline looms
China’s digital out-of-home market leader Focus Media Holding and Internet firm Sina could restructure their $1.3bn takeover deal after failing to secure government approval.
Speaking with analysts following the announcement of Sina’s second-quarter financials, Sina CEO Charles Chao said that the deal, which would see his firm acquire most of Focus’s out-of-home business, “will now be completed without the approval from the Chinese commerce department for the anti-trust review. Until now, we have not received an official application acceptance for the anti-trust review from the commerce department.
“Given our understanding of such a review process, we believe that it is unlikely that approval will be obtained by the end of September, which is the extended deadline for the deal closing agreed by both parties.”
He added: “We are currently in discussion with the Focus Media management in either extending the closing deadline or altering the deal structure. We have not reached any conclusion on such discussion at this point.”
A third option – echoed by some analysts – would be to abandon the deal entirely, Chao acknowledged, but “the complete merger is always preferred”.
“We believe that some of the difficulties we have encountered can be overcome given the time but it’s difficult to assess what exactly is the timing for such a process.”
Chao’s comments in a conference call were transcribed by the Seeking Alpha Website.
www.focusmedia.cn
english.sina.com
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