, the Chinese Internet portal that in recent years has subsided from giving overseas investors much guidance on its product development except for quarterly conference calls, has reared its head to announce that Credit Suisse, Merrill Lynch, Citi and Susquehanna Financial Group are all ready to cash in on the initial public offering of Sohu's online game subsidiary Limited, a developer of massively multi-player online role-playing games, has filed a registration statement on Form F-1 with the U. S. Securities and Exchange Commission for an IPO of American Depositary Shares. Each ADS represents two Class A ordinary shares of Changyou and the estimated price for each ADS offered ranges from USD14.00 to USD16.00. The registration statement has not yet become effective. The ADSs may not be sold, nor may any offers to buy be accepted, prior to the time the registration statement becomes effective, states the company.

Credit Suisse and Merrill Lynch & Co. will act as joint book-runners for the offering, while the senior manager and manager of the offering are Citi and Susquehanna Financial Group, LLLP, respectively.

A total of 7,500,000 ADSs of Changyou will be offered for sale. Of this total, 3,750,000 ADSs will represent newly-issued Class A ordinary shares being offered for sale by Changyou and 3,750,000 ADSs will represent Class A ordinary shares being offered for sale by (Game) Limited, an indirect wholly-owned subsidiary of Sohu.

Proceeds to each of Changyou and Sohu Game from ADSs sold in the offering are expected to be approximately USD52.3 million, and the total proceeds are expected to be approximately USD104.6 million, assuming an initial public offering price per ADS of USD15.00, which is the midpoint of the estimated public offering price range, and after deducting underwriting commissions but without deducting any offering expenses payable by Changyou or Sohu Game. In addition, up to 15% of the 7,500,000 ADSs being offered initially, or up to 1,125,000 additional ADSs, will be available for purchase by the underwriters from Sohu Game to cover over-allotments, at any time within 30 days after the effectiveness of the registration statement.

After the IPO of the MMORPG company, Sohu's equity in will decrease from 84.2% to 70.7%.


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