- Wanda Sports & Media already owns all Class B ordinary shares of WSG
- Proposing buyer plans to fund transaction through equity investments or loans
Wanda Sports Group (WSG), the Beijing-based sports events, media and marketing firm, has confirmed the receipt of a preliminary non-binding proposal letter to acquire all of the company’s outstanding Class A ordinary shares.
The offer was made on 30th September by Wanda Sports & Media, a wholly-owned subsidiary of the Dalian Wanda Group.
The Hong Kong-based holding firm already owns all Class B ordinary shares of Wanda Sports Group, representing around 71.68 per cent of all the issued and outstanding shares of the company, but is now looking to buy all of the Class A shares at a price of US$1.67 each.
According to an official release, Wanda Sports & Media plans to fund the acquisition through equity investments or loans provided by its affiliates or other parties. The proposal letter also indicated that the company is open to considering alternative structures.
The WSG board will now evaluate the proposed transaction, although it is likely that the deal will go through given that Wanda Sports and Media has 91 per cent voting power of the company due to the number of Class B shares that it holds.
‘The board cautions the holders of Class A ordinary shares and the holders of ADSs and others considering trading ADSs that the board has just received the proposal letter and has not had an opportunity to carefully review and evaluate the proposal or make any decision with respect to the company's response to the proposal,’ a statement read. ‘There can be no assurance that any definitive offer will be made or that this or any other transaction involving the company will be approved or consummated.’
News of the buyout offer saw shares in WSG, which owns the Infront sports marketing agency, soar 28 per cent.
WSG has been hit hard by the Covid-19 pandemic and recently reported its second straight quarter of significant revenue declines due to losses related to the health crisis.
Total revenue generate by the company in the second quarter of 2020 stood at €51.8 million (US$60.4 million), which represented a decrease of 75 per cent year-over-year.