A deal between Chinese portal SINA and Focus Media may be falling apart. SINA agreed to purchase some assets from Focus Media (NSDQ: FMCN) in December for roughly $1 billion, including the company’s digital out-of-home ad network. However, according to investment bank JLM Pacific Epoch, which cites a local news report (via Tech Trader Daily), the merger has broken down. There’s apparently concern that neither company’s stock has increased very much since the initial announcement of the deal and that key executives have left one of the Focus Media businesses that SINA is buying.
This follows reports from several analysts (also via Tech Trader Daily) that the deal could be restructured because of the weak advertising market, which has sharply cut the value of the Focus Media assets that SINA agreed to buy. During the first quarter of the year, for instance, revenue from those assets plummeted 23 percent compared to the same period a year ago. In the meantime, Chinese regulatory authorities are apparently still reviewing the deal.