Giant Interactive pushes Chinese LBO financing

Author: Ashley Lee | Published: 29 Jul 2014

The sponsor-led leveraged buyout (LBO) of Giant Interactive highlighted banks’ increasing comfort with borrowers’ underlying credit.

It’s the latest in a growing list of US-listed Chinese take-privates to set a precedent for Asian acquisition finance. The likes of China Fire and Security, AsiaInfo-Linkage and especially Focus Media – the largest-ever US-listed ChinaCo to go private – have set precedents for subsequent deals.

The $3 billion take-private of massive multiplayer online game (MMOG) developer Giant Interactive by Baring Private Equity Asia and Hony Capital follows Focus Media in terms of size, profile and the mix of banks.

But as an online games company, Linklaters’ David Irvine, who acted for the banks on the financing, said this latest deal involved a different and more challenging credit story.

"The online games sector is...