Shanda Games sells another 43% stake to review its bumpy road back

But Shanda Games is not alone in this battle to delist. In addition to game companies, in the Internet field, Momo, Qihoo 360 and others have also proposed privatization plans one after another.

On June 30, Century Huatong, an A-share listed company that is suspending trading, announced that Huatong Holdings, Shanghai Liyou and "Orient Capital" jointly initiated the establishment of "Litian Investment","Lihua Investment","Lihai Investment", collectively referred to as "Lihai Fund", and will contribute a total of 6.39 billion yuan to indirectly hold 43% of Shanda Games.

More than two months ago, Shanda Games just announced a US$1.9 billion final privatization transaction agreement with CapitaLand (and its subsidiaries). It may be worth recalling that Shanda Games has gone on the road of privatization and return to A-shares for more than a year:

On September 25, 2009, Shanda Games was successfully listed (IPO) on NASDAQ in the United States, with a financing amount of US$1.04 billion, becoming the largest IPO in the United States that year.

However, on January 24, 2014, less than five years after Shanda Games went public, it announced that they had offered to acquire all ADS shares of Shanda Games at a price of US$6.90 per share due to receiving privatization offers from parent companies Shanda Interactive Entertainment and Chunhua Capital subsidiaries.

In April 2014, Perfect World agreed to subscribe for 30.33 million shares of Class A common stock of Shanda Games for US$100 million; in September of the same year, Perfect World sold this share and withdrew from the privatization transaction of Shanda Games.

On November 27, Shanda Games Co., Ltd. announced that its parent company Shanda Networks had sold its shares in Shanda Games to Ningxia Zhongyin Cashmere International Group Co., Ltd. and Eili Shengda Holdings, which once made the outside world think that Shanda Games relied on the shell of BOC Cashmere Industry to return to the domestic A-share market.

In April 2015, Shanda Games announced that it had reached a final privatization transaction agreement with CapitaLand and its subsidiaries. The transaction is expected to be completed in the second half of 2015.

Shanda Games has not only changed its external corporate holdings repeatedly, but in recent years, the company's top management has also changed repeatedly on the road to privatization. First, in November 2014, Chen Tianqiao resigned from the board of directors of Shanda Games and stepped down as chairman of Shanda Games, with Acting CEO Zhang Yingfeng serving as chairman of Shanda Games; secondly, in April 2015, it was announced that Chief Financial Officer Wei Chengshu would leave and appointed Shanda Group Senior Vice President of Finance Yao Li as the new CFO.

Shanda Games, which has intended to move to privatization since 2014, has gone through more than a year of development and changes. It is obvious that this road is not so smooth, and it is not so easy to retreat from Nasdaq.

Despite the difficulty of delisting, many companies are still on the road to privatization for long-term transformation and development. For example, Giant Technology completed the privatization transaction in July 2014, and within seven years of listing, it lost nearly half of its market value; on April 27 this year, Perfect World also announced the signing of a final privatization agreement and is expected to delist in the second half of the year.

Part of the reason why these companies returned to A-shares through privatization after their successful listing on NASDAQ should be attributed to the fact that companies are undervalued in U.S. stocks, resulting in a shrinking market value. Compared with the U.S. market, especially In the game market, China has more potential, and most of the experience users are Chinese. Therefore, American investors do not understand domestic companies and do not have much confidence in them. Part of the reason is that companies such as Shanda Games are currently in decline. As we all know, Shanda Games and Perfect World are both established end-game companies. However, with the current weak end-game market, it is obvious that the model of making profits from a few classic end-games is no longer suitable for the current market environment where mobile games are booming.

But Shanda Games is not alone in this battle to delist. In addition to game companies, in the Internet field, Momo, Qihoo 360 and others have also proposed privatization plans one after another.

Editor: yvonne