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Wanda Sports Group receives non-binding share proposal that could lead to delisting

Wanda Sports Group Co. initial public offering (IPO) at Nasdaq MarketSite in New York on July 26, 2019 (Michael Nagle/Bloomberg via Getty Images)

Wanda Sports Group, the sports marketing entity that houses the Infront agency, has received an offer from a subsidiary company of Wang Jianlin’s Dalian Wanda, the Chinese multinational conglomerate, to acquire all outstanding Class A ordinary shares.

The non-binding proposal from Wanda Sports & Media (Hong Kong) Holding Co. Limited, a limited liability company incorporated in Hong Kong, was received today (Wednesday) by Wanda Sports Group Company Limited.

Should a definitive offer be made and approved, then it could lead to the delisting of Wanda Sports Group, which issued a downsized initial public offering on the Nasdaq stock exchange in July 2019 with fewer shares sold than initially sought.

In a move to buy back the shares, the Hong Kong-based holding company has offered $2.50 (€2.13) in cash per ADS (American depositary share) or $1.67 per Class A ordinary share.

Wanda Sports Group Company Limited, which is to evaluate the proposal, said: “The Proposing Buyer beneficially owns all Class B ordinary shares of the Company, representing approximately 71.68 per cent of all the issued and outstanding shares of the Company and approximately 91.01 per cent of the aggregate voting power of the Company.

“According to the Proposal Letter, the Proposing Buyer intends to fund the consideration payable in the Proposed Transaction with equity investments or loans provided by the Proposing Buyer’s affiliates or other parties.

“The Proposing Buyer also indicated that it is open to considering alternative structures, including an acquisition by the Company of Class A Ordinary Shares and ADSs, at the same price.”

A delisting of Wanda Sports Group would mean that it would no longer have to publicly publish its financial results as currently required by the US Securities and Exchange Commission (SEC) and Nasdaq.

In the letter from the Hong Kong-based holding company, which is signed by director Lin Zhang, it is stated that the proposal “represents a premium of 38.9 per cent to the closing price” of Wanda Sports Group’s American depositary shares on September 29.

The Hong Kong branch of Deutsche Bank has been recruited to advise on any possible binding offer.

Wanda Sports Group made its debut on the Nasdaq stock market on July 26, 2019 with a revised share price of $8 and total IPO of $190.4 million. A total of 23.8 million ADS shares were sold (at $8 each).

At the start of the month, Wanda Sports Group reported a 75-per-cent fall in second-quarter revenues as the Covid-19 shutdown took effect.

Wanda Sports’ second-quarter revenue from continuing operations was €51.8m ($60.8m) as its Spectator Sports, Digital, Production and Sports Solutions and Mass Participation units were all badly hit.