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IBDvalueinvestin (99.58)

SINA Partial buyout of FMCN for $1.4B will occur Oct 1st or soon thereafter

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September 11, 2009 – Comments (3) | RELATED TICKERS: FMCN , SINA

Focus Media (FMCN) outdoor acquisition by SINA . The main hold-up is the Chinese government's extensive review process, which I believe is occurring due to the upcoming 60th anniversary of the communist party on October 1st. When that date passes, I think the government may give the green light to the acquisition.

In addition, both sides continue to want the deal to consummate and Sina has even added Focus Hot Brand Zone to its website, which is an advertising section on the site for Focus Media's outdoor clients. Clearly that would have not occurred if both sides had cooled to the deal or if they believed that the government would strike it down. Plus, no major shareholders have come out against the deal.

 

This paragragh was taken from a seeking alpha article on Aug. 31, 2009.

3 Comments – Post Your Own

#1) On September 11, 2009 at 2:11 PM, IBDvalueinvestin (99.58) wrote:

Upside seen for Sina by Barrons = upside for FMCN

http://online.barrons.com/article/SB125175577994573955.html?ru=yahoo&mod=yahoobarrons

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#2) On September 12, 2009 at 11:05 PM, IBDvalueinvestin (99.58) wrote:

Here is why SINA going up = FMCN going up.

Its because the majority of FMCN is now basically SINA shares.

Under the terms of the agreement, upon closing, SINA will issue 47 million newly issued ordinary shares to the Company as the consideration for the acquired assets. The Company will then distribute the SINA shares to its shareholders shortly after the closing. As a result of the above transaction, these lines of business have been accounted for as discontinued operations in accordance with U.S. GAAP. The assets to be sold to SINA as a business held-for-sale in accordance with US GAAP are not depreciated or amortized nor are they subject to the same impairment analysis as assets held and used in continuing operations. Therefore, non-GAAP financial measure for discontinued operations in the first quarter of 2009 excluded not only the non-cash share-based compensation, acquired intangible asset amortization expense resulting from acquisitions, impairment charges of goodwill, acquired intangible assets and fixed assets but also depreciation expenses of fixed assets.

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#3) On September 12, 2009 at 11:05 PM, IBDvalueinvestin (99.58) wrote:

Here is why SINA going up = FMCN going up.

Its because the majority of FMCN is now basically SINA shares.

Under the terms of the agreement, upon closing, SINA will issue 47 million newly issued ordinary shares to the Company as the consideration for the acquired assets. The Company will then distribute the SINA shares to its shareholders shortly after the closing. As a result of the above transaction, these lines of business have been accounted for as discontinued operations in accordance with U.S. GAAP. The assets to be sold to SINA as a business held-for-sale in accordance with US GAAP are not depreciated or amortized nor are they subject to the same impairment analysis as assets held and used in continuing operations. Therefore, non-GAAP financial measure for discontinued operations in the first quarter of 2009 excluded not only the non-cash share-based compensation, acquired intangible asset amortization expense resulting from acquisitions, impairment charges of goodwill, acquired intangible assets and fixed assets but also depreciation expenses of fixed assets.

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