Sina, Focus Media $1.66 billion deal likely dead

PHILADELPHIA (AP) — A $1.66 billion deal between Focus Media Holding Ltd. and Sina Corp., an operator of Chinese language Web sites, is likely dead after the companies said Monday they won't extend a deadline for closing the transaction.

Sina was set to buy a big chunk of Focus Media's business that places advertising in airports, malls, office buildings and other areas. The agreement, which wasn't received well by investors when it was announced in late 2008, is set to expire if approval from the Chinese Ministry of Commerce doesn't arrive by Wednesday.

"The delayed consummation of the transaction has negatively impacted the business operations of both sides," said Sina CEO Charles Chao in a statement.

Investors had fretted that Sina, one of the most recognized Internet brands in China, is putting too much on top of its core online ad business, while Focus Media would lose operations that generate more than half of its revenue and nearly three-quarters of profit.

Sina would have gotten valuable advertising real estate, while Focus Media would be left with an Internet advertising unit, movie theater advertising network and some billboards.

Under the deal, Sina would have paid for Focus Media's assets with 47 million newly issued shares.

Separately, Sina said it has sold 5.6 million common shares for $180 million to New-Wave Investment Holding Co., a British Virgin Islands-based firm founded and controlled by Chao and other Sina management. Proceeds will be used for future acquisitions and corporate uses.

U.S.-traded shares of Sina were up 91 cents, or 2.6 percent, to $36.16 in afternoon trading. They earlier hit a 52-week high of $36.90, eclipsing a previous peak of $36.60.

Meanwhile, shares of Focus Media slid 2 cents to $11.01.