Shanda Announces Formation Of New Consortium To Acquire Company

(RTTNews) - Shanda Games Ltd. (GAME) said Monday it has been informed that Yili Shengda Investment Holdings (Hong Kong) Company Ltd., an affiliate of the company's acting CEO,Yingfeng Zhang, and certain of Yili's affiliates have filed a statement on Schedule 13D with respect to Shanda Games on December 5.

According to the 13D Statement, Ningxia Yilida Capital Investment Limited Partnership, the sole shareholder of Yili, and Ningxia Zhongyincashmere International Group Co., Ltd. have entered into a consortium agreement pursuant to which they have agreed to form a consortium to acquire Shanda Games in a "going private" deal.

The Shanda board of directors previously received a preliminary non-binding proposal letter dated January 27, 2014 from a consortium then consisting of Shanda Interactive Entertainment Ltd., the then-controlling shareholder of the company, and certain other parties. The SNDA Consortium proposed to acquire Shanda in a "going private" transaction for US$3.45 per Class A Share or Class B Share, or US$6.90 per ADS.

Subsequently, the Shanda Board formed a special committee of independent directors which is authorized to consider the SNDA Proposal and other alternative proposals or competing offers and make recommendations to the Board; and Shanda Interactive sold all ordinary shares of Shanda held by it to various parties, including Ningxia and its affiliates and Yili, and informed Shanda that it did not intend to remain a member of the SNDA Consortium.

Currently, Ningxia and its affiliates collectively own Class A Shares and Class B Shares representing about 24.1% of Shanda's issued and outstanding ordinary shares as of October 20, 2014 and about 40.1% of the total number of votes represented by the company's issued and outstanding ordinary shares as of October 20, 2014; and Yili owns Class B Shares representing about 9.1% of the company's issued and outstanding ordinary shares as of October 20, 2014 and about 34.5% of the total number of votes represented by the company's issued and outstanding ordinary shares as of October 20, 2014.

The company said the special committee has not set a definitive timetable for the completion of its evaluation of the proposed transaction or any other alternative transaction.