Sina Deal Could Be A Winner
Diluting shareholders to buy a slower growing business doesn't often make sense, but the bid by Chinese Internet portal Sina for the off-line digital-advertising assets of Focus Media Holding could be an exception.
The distinction between the two companies couldn't be more stark. Sina's profits are growing at double-digit rates, while Focus Media's recent past has been marked by one fumble after another.
Sina's challenge is to prove that the problem with the business it is buying -- a network of television screens in building lobbies and elevators across China -- is a result of poor management, not a poor market.
Sina is offering Focus Media and its shareholders 47 million shares of its stock and about 46% of the combined company. Focus Media would retain a rump ad business. Based on closing share prices Monday -- both companies trade only in New York -- the value of the assets sold is about $1.14 billion.
Sina's shares fell 17% Monday. It is little surprise that shareholders are doubtful, particularly because they are being diluted out of nearly half the company. But what they are getting in return could pay off long term.
Where this deal holds the most potential is in its massiveexpansion of Sina's base of advertisers. Focus Media, China's biggest outdoor advertiser, has a customer base three times as large as Sina's, says Morgan Stanley analyst Richard Ji.
These assets accounted for 52% of Focus Media's revenue but 73% of gross profit in the first nine months of the year. Mr. Ji figures that the deal will actually boost Sina's earnings per share next year by 45% to 60%.
Sina should be able to cross-sell between the online and off-line platforms, and diversify out of a problematic concentration of advertisers in the finance, real-estate and auto industries. Some are skeptical. Focus Media itself housed off-line and online advertising under one roof and failed to capitalize on it.
But these failures on Focus Media's part have presented an opportunity for Sina. Focus Media has been under fire after missing third-quarter earnings targets when business was supposed to have boomed during the Beijing Olympics. Later, it took a $200 million write-down on a business just one year after buying it. The company's market value has fallen by more than 80% this year.
Now, Sina needs to prove that what it has bought is a bargain -- and not just cheap.
稀释现有股东的权益来收购一项增长缓慢的业务往往是说不通的，不过中国互联网门户网站新浪(Sina Corp.)收购分众传媒(Focus Media Holding)旗下数字广告资产的交易可能是个例外。
这两家企业简直有着天壤之别。新浪的利润在以两位数的速度增长，而分众传媒最近却是接二连三的失误。
新浪面对的挑战是要证明，自己收购的业务原来之所以处境艰难是因为管理不善，而非市场惨淡。分众传媒的这项业务是遍布中国各地楼宇大厅和电梯中的电视屏幕网络。
吉林省吉林市一个冰灯上的新浪网标志新浪提出向分众传媒及其股东增发4,700万股新浪股票，这相当于合并后公司约46%的股份。分众传媒将保持一小部分广告业务。按照周一的收盘价，出售的资产价格约为11.4亿美元。新浪和分众传媒均只在纽约上市。
新浪股票周一下跌17%。股东们心存怀疑，这在意料之中，特别是因为他们的股份被稀释后几乎失去了半个公司。不过长期来看，他们获得的回报可能会让付出物有所值。
这桩交易的最大潜力在于，它会极大地扩展新浪的广告客户群。摩根士丹利(Morgan Stanley)分析师季卫东(Richard Ji)说，分众传媒的客户群规模是新浪的三倍。分众传媒是中国最大的户外广告商。
今年前9个月，这些资产的收入占分众传媒总收入的52%，毛利润却占到了73%。季卫东说，这桩交易实际上会令新浪明年的每股收益提高45%-60%。
新浪应该能够在互联网和非互联网平台之间交叉销售广告，摆脱自身广告客户多集中在金融、房地产和汽车业的模式，实现客户的多元化。有些人对此表示怀疑。分众传媒本身既有互联网广告也有非互联网广告业务，但也未能加以利用。
但是分众传媒的这些失败却为新浪提供了一个机会。北京奥运会期间广告业务本该大幅飙升，但分众传媒却没能实现第三季度的收益目标，它也因此成了众矢之的。之后，该公司在收购了一项业务仅一年后就冲销了2亿美元的相关资产。该公司的市值今年已经累计缩水八成以上。
眼下，新浪需要证明自己买的是项赚钱的业务，而不仅仅只是价格便宜。
关键字:财经新闻
生词表:
Diluting shareholders to buy a slower growing business doesn't often make sense, but the bid by Chinese Internet portal Sina for the off-line digital-advertising assets of Focus Media Holding could be an exception.
The distinction between the two companies couldn't be more stark. Sina's profits are growing at double-digit rates, while Focus Media's recent past has been marked by one fumble after another.
Sina's challenge is to prove that the problem with the business it is buying -- a network of television screens in building lobbies and elevators across China -- is a result of poor management, not a poor market.
Sina is offering Focus Media and its shareholders 47 million shares of its stock and about 46% of the combined company. Focus Media would retain a rump ad business. Based on closing share prices Monday -- both companies trade only in New York -- the value of the assets sold is about $1.14 billion.
Sina's shares fell 17% Monday. It is little surprise that shareholders are doubtful, particularly because they are being diluted out of nearly half the company. But what they are getting in return could pay off long term.
Where this deal holds the most potential is in its massiveexpansion of Sina's base of advertisers. Focus Media, China's biggest outdoor advertiser, has a customer base three times as large as Sina's, says Morgan Stanley analyst Richard Ji.
These assets accounted for 52% of Focus Media's revenue but 73% of gross profit in the first nine months of the year. Mr. Ji figures that the deal will actually boost Sina's earnings per share next year by 45% to 60%.
Sina should be able to cross-sell between the online and off-line platforms, and diversify out of a problematic concentration of advertisers in the finance, real-estate and auto industries. Some are skeptical. Focus Media itself housed off-line and online advertising under one roof and failed to capitalize on it.
But these failures on Focus Media's part have presented an opportunity for Sina. Focus Media has been under fire after missing third-quarter earnings targets when business was supposed to have boomed during the Beijing Olympics. Later, it took a $200 million write-down on a business just one year after buying it. The company's market value has fallen by more than 80% this year.
Now, Sina needs to prove that what it has bought is a bargain -- and not just cheap.
稀释现有股东的权益来收购一项增长缓慢的业务往往是说不通的，不过中国互联网门户网站新浪(Sina Corp.)收购分众传媒(Focus Media Holding)旗下数字广告资产的交易可能是个例外。
这两家企业简直有着天壤之别。新浪的利润在以两位数的速度增长，而分众传媒最近却是接二连三的失误。
新浪面对的挑战是要证明，自己收购的业务原来之所以处境艰难是因为管理不善，而非市场惨淡。分众传媒的这项业务是遍布中国各地楼宇大厅和电梯中的电视屏幕网络。
吉林省吉林市一个冰灯上的新浪网标志新浪提出向分众传媒及其股东增发4,700万股新浪股票，这相当于合并后公司约46%的股份。分众传媒将保持一小部分广告业务。按照周一的收盘价，出售的资产价格约为11.4亿美元。新浪和分众传媒均只在纽约上市。
新浪股票周一下跌17%。股东们心存怀疑，这在意料之中，特别是因为他们的股份被稀释后几乎失去了半个公司。不过长期来看，他们获得的回报可能会让付出物有所值。
这桩交易的最大潜力在于，它会极大地扩展新浪的广告客户群。摩根士丹利(Morgan Stanley)分析师季卫东(Richard Ji)说，分众传媒的客户群规模是新浪的三倍。分众传媒是中国最大的户外广告商。
今年前9个月，这些资产的收入占分众传媒总收入的52%，毛利润却占到了73%。季卫东说，这桩交易实际上会令新浪明年的每股收益提高45%-60%。
新浪应该能够在互联网和非互联网平台之间交叉销售广告，摆脱自身广告客户多集中在金融、房地产和汽车业的模式，实现客户的多元化。有些人对此表示怀疑。分众传媒本身既有互联网广告也有非互联网广告业务，但也未能加以利用。
但是分众传媒的这些失败却为新浪提供了一个机会。北京奥运会期间广告业务本该大幅飙升，但分众传媒却没能实现第三季度的收益目标，它也因此成了众矢之的。之后，该公司在收购了一项业务仅一年后就冲销了2亿美元的相关资产。该公司的市值今年已经累计缩水八成以上。
眼下，新浪需要证明自己买的是项赚钱的业务，而不仅仅只是价格便宜。
关键字:财经新闻
生词表:
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