US BUYOUTS 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 privatise a firm directly targeted by shortseller Muddy Waters.
The offer is the latest 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.
Carlyle, the world’s biggest fund by assets, FountainVest Partners, CITIC Capital Partners, CDH and China Everbright are backing a proposed $3.5 billion delisting of display-advertising firm Focus Media, working with the company’s chief executive.
Private equity funds have been picking over hundreds of Chinese firms listed in the US, looking for viable takeover targets, but until now the deals have all been below $1 billion, largely because of difficulties getting financial backing.
Funding for buyouts of Chinese companies is done through an offshore holding company. However many banks cannot lend on such deals due to the risk of non-payment. – (Reuters)
