Case Study On Going Private Of SIE Limited

During 2011 to 2012, with Shanda interactive entertainment Limited, Alibaba, Focus Media as a representative of the wave of going private is not fading. Recently, companies including QIHU,MOMO and RENN were also successively going private from the United States capital markets. On December 28,2015, Focus Media was back-door listing by Hedy holding,becoming the first company of listing Chinese capital market after going private from United States capital markets.In the mature capital market, listing and delisting is equal to coexist. But nowadays the society has a very perfect Chinese listed systems and effective delisting systems also need to keep pace with The Times. Compared with foreign mature capital market has strict systems, Chinese capital market started late and delisting systems is imperfect. The main reason is the lack of operability delisting systems. It is need to complete the delisting systems in the further, so as to have a going private of the normal market behavior and to make Chinese capital markets developed at an early date.This paper make Shanda interactive entertainment Limited as an example, analyzing the motivates of Shanda’s going private. It is concluded that the falling of shareholder wealth and the company’s strategic structural adjustment. Getting the tax shield and reducing transaction costs are financial benefits.Pointing out the risks after going private that the large privatisation costs and difficult to return to A shares. There are conclusions that share price falling of shareholder wealth and corporate strategic adjustment are the main motivation. Putting forward the suggestions of reasonably establishing the development strategy of enterprises in the capital markets ands perfecting our country multi-level capital market construction.