This excerpt taken from the SOHU 8-K filed Mar 18, 2009.
Changyous Initial Public Offering Structure
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 Sohu.com (Game) Limited (Sohu Game), 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 $52.3 million, and the total proceeds are expected to be approximately $104.6 million, assuming an initial public offering price per ADS of $15.00, which is the midpoint of the estimated public offering price range, and after deducting underwriting discounts and 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 (or the Greenshoe), 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 offering, Sohu Game will continue to hold Class B ordinary shares of Changyou. Each Class B ordinary share is entitled to ten votes per share on any matter brought to a vote of Changyou shareholders, whereas Class A ordinary shares (which the ADSs represent) are entitled to one vote per share. Accordingly, assuming that the underwriters do not exercise their over-allotment option, after the offering is completed Sohu will hold approximately 70.7% of the total outstanding equity interests in Changyou, but will control 81.5% of the total voting power.
Credit Suisse and Merrill Lynch & Co. will act as joint book-runners for the offering. Senior manager and manager of the offering are Citi and Susquehanna Financial Group, LLLP, respectively.