Shanghai-based Chinese digital media and display advertising company Focus Media Holding Limited is planning to list on the Chinese A-share market via a reverse merger, potentially raising a total of RMB9.2 billion (US$1.5 billion), according to leaked investor documents reported by Chinese media.
After being taken private from the NASDAQ by company founder and a group of private equity firms in May 2013, Focus Media is reportedly being valued at up to RMB50 billion (US$8 billion) in the planned listing, compared to a valuation of US$3.7 billion at the time of its privatization nearly two years ago.
The latest revelation also suggests that Focus Media has given up its plan to list in Hong Kong, which it reportedly sought to complete last year, to a float on China’s domestic exchanges.
Focus Media’s founder, Jason Nanchun Jiang, holds 26.73% of the company currently. FountainVest Partners, Fosun International Limited, CITIC Capital China Partners each holds 19.71%, 17.43%, 9.85%, respectively, according to the reports.
The Carlyle Group and China Everbright Structured Investment Holdings also participated in the privatization deal, but it’s unclear how large a stake they each own.
According to the reports, Focus Media is to list via a reverse merger with Shenzhen-listed Jiangsu Hongda New Material Co., Ltd., a rubber producer and distributor based in Yangzhong city, Jiangsu province. The transaction is expected to be completed in the summer.
Founded in 2003, Focus Media operates an advertising network in over 100 cities in China. It recorded net profit of RMB2.5 billion in 2014, up from RMB1.3 billion in 2013, according to the leaked documents.
(Update: In a securities filing, Jiangsu Hongda New Material confirmed the reverse merger, and says it values Focus Media at RMB45.70, or US$7.38 billion.)