Giant Interactive Agrees Privatization Offer From Baring Asia, Hony Capital

Shanghai-based online game developer and operator Giant Interactive Group Inc. says its board of directors has accepted a privatization offer from an investor consortium including the company’s chairman Shi Yuzhu, Baring Private Equity Asia and Hony Capital, according to a company announcement.

Last December, the consortium proposed to buy all of the New York Stock Exchange-listed Giant Interactive‘s outstanding shares at a price of US$11.75 per share in cash, valuing the company at around US$2.8 billion.

Giant Interactive has now entered into a definitive agreement and plan of merger with its parent company, Giant Investment Limited, and Giant Merger Limited, a wholly owned subsidiary of the parent company.

According to the agreement, Giant Investment will pay US$12.00 per American Depository Share to acquire all outstanding shares of Giant Interactive. The price is an 2.1% increase than the initial offering price. It now values the company at US$3 billion.

The current offering price represents an 18.5% premium to Giant Interactive’s closing price on November 22, 2013, the day before the initial bid was disclosed.

As of the date of the merger agreement, the members of the consortium own an aggregate 49.3% of the outstanding shares of Giant Interactive.

Giant Interactive’s board is recommending shareholders to vote for the go-private deal. After shareholder approval, the deal is expected to close during the second half of this year.