Shanda Interactive Entertainment Ltd ADS (SNDA)

[eastunder]

Shanda Interactive gets $2.33 billion offer from CEO

Mon Oct 17, 2011 8:14am EDT

(Reuters) - Chinese Internet firm Shanda Interactive (SNDA.O) said it received a cash buyout offer of about $2.33 billion from its chief executive and key shareholder Tianqiao Chen.

The buyers have held preliminary discussions with J.P. Morgan about financing the proposed transaction and received a "highly confident" letter, the company said in a statement.

Chen, his wife and non-executive director Qianqian Luo, and his brother and Shanda's Chief Operating Officer Danian Chen together control about 68.4 percent of the company, excluding options, as of September 30.

J.P. Morgan will also act as the financial advisor for the buyers, said the company incorporated in the Cayman Islands.

Shanda Interactive, which spun off its core games business -- Shanda Games (GAME.O) -- through an IPO in 2009, is seeing trying times with its non-game units delivering weak results, and is trying to diversify into other entertainment areas.

The company's online literature unit Cloudary Corp has filed with U.S. regulators for an IPO of about $200 million.

Chen's offer values Shanda at $41.35 per American Depositary Share -- a 23.5 percent premium to Friday's close -- or $20.675 per ordinary share in cash, the company said in a statement.

The buyers expect the commitment for the required debt financing to be in place by the time the definitive agreement is signed, they told Shanda in a proposal letter dated October 15.

The company's board has formed a special committee of independent directors to consider the proposed transaction, it said.