A group led by AirMedia Chairman and CEO Herman Man Guo sent a non-binding proposal letter to the company's board of directors offering to buy all outstanding ordinary shares of the company they do not own for $6 an America Depositary Share in cash. The offer represents a 70.5% premium over the company's Thursday closing price.
Guo and the buyer group plan on funding the potential transaction with a combination of debt and/or equity capital as well as rollover equity in the company.
AirMedia's board form a special committee of three independent and disinterested directors to consider the proposal to take the company private.
About 4.1 million shares of AirMedia were traded by 9:35 a.m. Friday, well above the company's average trading volume of about 2 million shares.
TheStreet Ratings team rates AIRMEDIA GROUP INC -ADS as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate AIRMEDIA GROUP INC -ADS (AMCN) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."