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Shanda Interactive Entertainment Limited Enters Into Definitive Agreement With Premium Lead Company Limited And New Era Investment Holding Ltd. For Going Private Transaction

Stocks in this article: SNDA

SHANGHAI, Nov. 22, 2011 /PRNewswire-Asia/ -- Shanda Interactive Entertainment Limited, incorporated in the Cayman Islands (" Shanda" or the " Company") (Nasdaq: SNDA), a leading interactive entertainment media company in China, announced today that it has entered into an Agreement and Plan of Merger, dated November 22, 2011 (the " Merger Agreement") with Premium Lead Company Limited (" Parent") and New Era Investment Holding Ltd. (" Merger Sub") pursuant to which Parent will acquire Shanda (the " Transaction") for US$20.675 per ordinary share or US$41.35 per American Depositary Share, each representing two ordinary shares (" ADS").  This represents a 26.6% premium over the Company's 30 trading day volume-weighted average price as quoted by NASDAQ on October 14, 2011, the last trading day prior to the Company's announcement on October 17, 2011 that it had received a "going private" proposal.  The Transaction values Shanda's equity at approximately US$2.3 billion on a fully diluted basis.

Parent is a British Virgin Islands business company jointly owned by Mr. Tianqiao Chen, Chairman of the Board, Chief Executive Officer and President of Shanda, his wife Ms. Qian Qian Chrissy Luo, who is a non-executive director of Shanda and his brother Mr. Danian Chen, who is the Chief Operating Officer and a director of Shanda (together, " Buyer Group").  Merger Sub is a newly-formed exempted company with limited liability incorporated under the laws of the Cayman Islands and a direct wholly owned subsidiary of Parent.  The Buyer Group collectively beneficially owns approximately 69.7% of the outstanding shares of the Company (excluding outstanding options of the Company) and intends to fund the Transaction through a combination of proceeds from a loan facility in the amount of US$180,000,000 from JPMorgan Chase Bank, N.A., cash in the Company and its subsidiaries, and a cash contribution from the Buyer Group.

Pursuant to the Merger Agreement, upon the terms and subject to the conditions thereof, at the effective time of the merger, Merger Sub will be merged with and into the Company, the Company will become a wholly-owned subsidiary of Parent and each of the Company's ordinary shares issued and outstanding immediately prior to the effective time of the merger (including ordinary shares represented by ADSs) will be converted into the right to receive US$20.675 in cash per ordinary share (or US$41.35 in cash per ADS) without interest, except for the ordinary shares (including ordinary shares represented by ADSs): (i) beneficially owned by the Buyer Group which will be cancelled without receiving any consideration and (ii) owned by holders of such ordinary shares who have validly exercised and not lost their appraisal rights pursuant to Section 238 of the Cayman Islands Companies Law, as amended.

The Company's Board of Directors, acting upon the unanimous recommendation of the Special Committee of Independent Directors formed by the Board of Directors, approved the Merger Agreement and the Transaction and resolved to recommend that the Company's shareholders vote to approve the Merger Agreement and the Transaction.  The Special Committee, which is composed solely of directors unrelated to any of Parent, Merger Sub, the Buyer Group or any of the management members of the Company, negotiated the terms of the Merger Agreement with the assistance of its financial and legal advisors.

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