Shanda Games: A Buyout of a Chinese Family Firm

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A controlling shareholder of the NYSE-listed Chinese online gaming company Shanda Games has offered a buyout at USD6.90 per American Depositary Share (ADS); each ADS consists of two ordinary shares. The offer provides a premium of 22 per cent to the stock's Friday close. Throughout the previous year, Shanda Games' ADS had typically traded in the range of USD3.00 to 4.50.As Shanda Games' independent directors attempt to evaluate the offer, they wonder: Should the shareholders accept it as it is? Should they ask for a higher price? Or should they look for the alternatives?
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