China’s No 1 mobile games publisher CMGE clears hurdle to privatisation

The largest publisher of mobile games in China is poised to join the ranks of mainland Chinese companies that are opting to delist in the United States.

China Mobile Games and Entertainment Group (CMGE) moved a step closer to being taken private after controlling shareholder V1 Group agreed to sell its entire 42.94 per cent stake in the company for US$297.96 million, according to V1’s filing with the Hong Kong stock exchange on Friday.

That followed Nasdaq-listed CMGE’s decision last week to enter into a merger agreement with Pegasus Investment Holdings and Pegasus Merger Sub, companies which represent a consortium of independent third-party Chinese buyers.

The deal will entail cash payments of US$1.5714 per Class A or Class B ordinary share, and US$22 per American depositary share, each of which represents 14 Class A ordinary shares.

Upon completion of that transaction, which is subject to majority shareholders’ approval, all of the Nasdaq-traded shares of CMGE will be cancelled and delisted.

The group of buyers include the unnamed affiliates of Orient Hongtai Zhihe (Beijing) Investment Management Company, ChangJiang Growth Capital Investment Company and Beijing HT Capital Investment Management Company.