Private equity deal at play for Focus Media
US buyout fund Carlyle Group and some of China's top private equity funds are targeting the biggest ever delisting of a New York-listed Chinese company, attempting to privatize a firm directly targeted by shortseller Muddy Waters.
The offer is the latest, and biggest by some distance, in a string of attempted management-led buyouts by US-listed Chinese companies, whose reputation among US investors has suffered after a series of alleged accounting scandals, Reuters reports.
Carlyle, the world's biggest fund by assets, FountainVest Partners, CITIC Capital Partners, CDH and China Everbright are backing a proposed US$3.5 billion delisting of display-advertising firm Focus Media Holding, working with the company's chief executive.
Private equity funds have been picking over hundreds of China firms listed in the United States, looking for viable takeover targets, but until now the deals have all been below US$1 billion, largely because of difficulties getting financial backing.
“Where these firms have often struggled with the delisting process is in getting financing to back them,'' said Paul Boltz, partner at law firm Ropes & Gray, which has worked on a number of take-private transactions.