The trading of Shanda Interactive Entertainment shares was halted yesterday on the NASDAQ Stock Exchange, after a majority of its shareholders approved the takeover offer from the company's chairman Chen Tianqiao for the price of about $2.3 billion.
Shareholders representing some 87 percent of its total outstanding ordinary shares voted in favor of the deal, the company stated Tuesday. Upon completion of the buyout, Shanda will become a privately-held company and will no longer be listed on the NASDAQ.
Under the bid, Chen Tianqiao, along with his wife Luo Qianqian and brother Chen Danian, who is also Shanda's chief operating officer, will pay $41.35 for each share, which is a 24 percent premium to the price when the bid was first made public in November.
Chen and his family own about 68.4 percent of the total shares.
"It is no longer necessary for the company to remain listed as its major businesses are listed separately or are in the process of seeking a listing," said Li Yan, an analyst at imeigu.com, a Beijing-based information provider on US stock markets.
Currently, Shanda Interactive operates the online gaming company Shanda Games, online literature platform Cloudary, online video portal Ku6 Media, and other online community and business units.
Shanda Games and Ku6 Media are already listed in the US. And the company's online literature platform is also seeking a listing in the US at present.
Sun Mengzi, an analyst at consulting firm Analysys International, said that privatization is beneficial to the long-term development of Shanda.
"Currently Shanda's online gaming business contributes some 70 to 80 percent of its total revenue, but in the long run, the company should also focus on other sectors to ensure future success," said Sun.
But if it remains listed, Shanda will have constraints in relocating its profits to units that are still suffering losses, like its online literature business, Sun noted.
Shares of Shanda Interactive went up 2.9 percent since the start of the year, and the stock closed Tuesday at $41.28.