Shanda Games Take-Private Bid Loses Backers

A group of private-equity firms, including Carlyle Group LP, have withdrawn from a $1.9 billion offer to take Shanda Games Ltd. private, the Chinese online-game company said Wednesday.

China-focused firm FountainVest Partners and Chinese private-equity player Primavera Capital have also pulled out from the consortium. The group was backing efforts by Shanda Games' controlling shareholders to buy out the game company. Perfect World Co., a Chinese rival, has also left the consortium, Nasdaq-listed Shanda Games said.

Among additions to the group are affiliates of Chinese brokerages Orient Securities Co. and Haitong Securities Co.--the country's second-largest brokerage by assets--and Ningxia Zhongyincashmere International Group Co., Shanda said.

Frank Tang, chief executive and managing partner of FountainVest, confirmed the firm had pulled out of the consortium, but he declined to comment further.

Representatives for Carlyle and Primavera weren't immediately available for comment.

In January, Shanda Games' controlling shareholder, media company Shanda Interactive Entertainment Ltd., said it and Primavera, had offered $6.90 per American depositary share for the game company. Shanda Interactive owns 65% of Shanda Games, according to S&P CapitalIQ. Shanda Games listed in the U.S. in September 2009 with an initial public offering price of $12.50 a share.

Perfect World and FountainVest joined the consortium in April, according to separate filings, while Carlyle joined in May.

If successful, Shanda Games' take-private bid would be the latest in a string of delistings by U.S.-traded Chinese companies in the past few years after accounting scandals and alleged fraud rocked share prices in the sector.

Another Shanda Games rival, Giant Interactive Group Inc., received a take-private offer in November from Chairman Yuzhu Shi and private-equity firm Baring Private Equity Asia. The bid valued the online-game developer at about $2.8 billion.

One of the largest of the take-private deals, also involving Carlyle, was last year's $3.7 billion delisting by advertiser Focus Media Holding Ltd., which was among China's biggest leveraged buyouts.

Since then, however, U.S.-listed Chinese companies have seen their shares once again rise as Alibaba Group Holding Ltd.'s potential blockbuster New York IPO looms. Take-private activity involving Chinese companies in the U.S. has subsequently slowed.

Write to Sonja Cheung at [e-mail] and Prudence Ho at [e-mail]

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