Focus Media (FMCN) Provides Update On Expected Charges from Restructuring Actions
Focus Media Holding Limited (Nasdaq: FMCN) today provided an update on the expected charges resulting from the restructuring of its CGEN in-store advertising network and announced the termination of its remaining wireless advertising (interactive marketing) business.
- According to the terms and conditions in the CGEN Share Purchase Agreement dated as of December 8, 2007, in addition to the initial payment of $168 million in cash paid, Focus Media was to make additional payments of up to $182 million, partly in cash and partly in Focus Media ordinary shares (valued at the per share equivalent of US$53.42 per ADS) contingent upon CGEN meeting certain earnings targets during the twenty four month period following the closing of the transaction. Because the 2008 performance of CGEN's in-store advertising business failed to reach the minimum conditions required for any additional earn-out payment, Focus Media has terminated the earn-out provisions in the CGEN Share Purchase Agreement and will make no further payments relating to CGEN acquisition
- Focus Media plans to restructure CGEN's current in-store advertising business. As a result, Focus Media expects to incur non-cash one-time restructuring charge of approximately $200 million in Q408.
Focus Media Holding Limited operates out-of-home advertising network using audiovisual digital displays in the People's Republic of China.
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