Giant Interactive Group Inc.
) reached a 52-week high of $11.62 per share on Mar 17 following
the confirmation of the company's merger agreement with Giant
Investment Limited and Giant Merger Limited, a wholly owned
subsidiary of Giant Investment.
Giant Investment will acquire Giant Interactive for $12 per
share and $12 per American Depository Share, totaling $3 billion.
Following the merger, expected to close in the second half of
2014, Giant Interactive will become a privately held company and
no longer trade on Nasdaq.
In Nov 2013, the company received a proposal from its chairman
Yuzhu Shi who already owns 49.3% of the company, would purchase
the rest with cash and proceeds from debt financing for $2.82
billion in cash. The company announced the formation of a special
committee of three members to evaluate the preliminary buyout
offer. The consortium proposed the acquisition of all of the
company's shares, including American Depositary Share (ADS) for
$11.75 per share/ADS. Each ADS represents one ordinary share of
the company. The committee assessed the offer and negotiate terms
to provide maximum value to its shareholders.
Investors are particularly interested as the deal reflects
5.3% premium to Giant Interactive's closing price of $11.40 on
On Mar 6, Giant Interactive
one of China's leading online game developers, delivered solid
fourth-quarter and full-year 2013 results. Adjusted earnings beat
both the Zacks Consensus Estimate and prior-year results on the
back of top-line growth and strong margins.
Net revenue beat the year-ago results and were in line with
the Zacks Consensus Estimate driven by the rising popularity of
these games. Gross profit also increased year over year on
account of higher sales.
Giant Interactive holds a Zacks Rank #2 (Buy). Investors
interested in Internet retailers may also consider stocks like
WebMD Health Corp.
China Distance Education Holdings Ltd.
). While WebMD Health sports a Zacks Rank #1 (Strong Buy), Tucows
Inc. and China Distance Education Holdings holds a Zacks Rank
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