Shanda Interactive Entertainment’s in-house legal team and their external legal advisors have been busy making deals over the past year. Having advised the company on its US$175m issuance of convertible bonds and acquisition of a majority state in NASDAQ-listed Hurray!, they have now acted on its pinning off and listing of its online game business unit.
Shanda Games, an online game developer, operator and publisher in China, has successfully launched the IPO of American Depositary Shares (ADSs), and has begun trading on the NASDAQ Global Select Market. The IPO, valued at US$1bn, is the largest IPO of the year so far in the US. It is also the second Chinese online game company to list in the US this year, following Changyou.com’s IPO in April.
“It’s been a long road to get here, and the result is very rewarding,” said Thomas Yih, the newly appointed general counsel of Shanda Games. US-qualified lawyer, he previously served as the general counsel of Shanda Interactive Entertainment from October 2008 to August 2009. Prior to joining Shanda, he was an attorney at Morrison & Foerster in Shanghai from September 2007 to October 2008 and served as senior counsel for a New York and Hong Kong dual-listed company based in China.
On the NASDAQ IPO of Shanda Games, Shanghai firm Jade & Fountain was the issuer’s PRC counsel, while Davis Polk &Wardwell acted as the issuer’s US counsel . The issuer also engaged Conyers Dill & Pearman for Cayman Islands law. Joint bookrunners Goldman Sachs and JP Morgan were represented by Simpson Thacher & Bartlett and Commerce & Finance.
Yih estimated that it took more than two years to complete the execution of the project since the decision to separate the business units was taken.
As Shanda’s online game business also extends to other jurisdictions – including Singapore, Korea, Japan and Hong Kong – Yih and his in-house team has had to work with law firms from those jurisdictions to complete this project. “Coordinating a large number of external counsels and handling a couple of transactions at the same time are very challenging,” said Yih. His in-house team worked on the Shanda Games IPO and Hurray! acquisition simultaneously.
With the proceeds from the offering, Shanda Games intends to fund possible future investments, joint ventures and acquisitions, meaning possible further mandates for its legal advisors. Some of the new ventures will be in overseas jurisdictions, according to Yih. “The past few years have been exciting, and the coming years will continue to be packed with activities and excitement as Shanda Games expands the global reach of its games. My new appointment is set to facilitate its international growth,” he said.
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