The following press releases and media reports about Chinese companies were carried on March 17. To view a full article or story, click on the link next to the headline.
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Hunan TV’s Online Video Platform Mango TV Lands 1 Bln Yuan Series A – Source (English article)
Tencent (HKEx: 700), Shanda Literature Units Join To Form Online Reading Group (Chinese article)
NZ’s Fonterra Buys Stake In China’s Beingmate (Shenzhen: 002570) For $553 Mln (English article)
Legend Group Plans July IPO, To Raise Up To $3 Bln – Report (Chinese article)
Consortium to Acquire Shanda Games (Nasdaq: GAME) Adds New Members (PRNewswire)
Bottom line: The new purchase of 3 smaller rivals by Ourpalm could position the company as a consolidator for China’s fragmented gaming sector, and could be followed by one or more similar purchases in the next year.
Ourpalm buys 3 smaller rivals
A newly announced deal will see online game operator Ourpalm (Shenzhen: 300315) combine with 3 smaller rivals in a relatively large deal that could lay the foundation for a major new player to drive much-needed consolidation in the space. The new company looks interesting for a number of reasons, including Ourpalm’s existing connection with leading movie maker Huayi Bros, which could become an important strategic partner for the company.
Ourpalm could also become a strong platform to absorb some of the smaller Hong Kong- and New York-listed gaming companies that have struggled for investor attention due to stalling profit and revenue growth caused by their lack of scale. Potential players for future tie-ups could include recently listed Hong Kong players like Linekong (HKEx: 8267) and Forgame (HKEx: 484), or New York-listed Sungy Mobile (Nasdaq: GOMO), whose shares have all languished since their IPOs. Read Full Post…
Bottom line: Perfect World’s de-listing plan is likely to succeed and could be followed by a merger with Shanda or Giant Interactive, while Renren is likely to also get bought out and de-list by the end of the year.
Perfect World gets buyout offer
Perfect World (Nasdaq: PWRD) has become the latest US-listed online game operator to decide it’s unappreciated by shareholders, announcing a plan to privatize and de-list its shares from New York. The management-led buyout offer shouldn’t come as a surprise, as it follows a steady stream of similar moves that has seen peers like Giant Interactive and Shanda Games (Nasdaq: GAME) also leave or prepare to leave the market.
At the same time, another headline from struggling social networking site (SNS) Renren (NYSE: RENN) is fueling speculation of a similar imminent de-listing. That news has Renren announcing the resignation of its CFO — news which should normally have a neutral to negative effect on the company’s stock. But in this case the stock has jumped on the news, indicating investors may think a buy-out offer is coming. Read Full Post…
Bottom line: Chen Tianqiao’s sale of his Shanda Games stake marks his symbolic exit from online entertainment, and he will probably return to deal-making by setting up his own private equity firm.
Chen Tianqiao steps down from Shanda Games
The slow-motion breakup of the online entertainment empire of Shanda Interactive has taken a major step forward, with news that the company is selling its entire stake in its core online gaming unit. The news follows previous reports that Shanda Interactive had reached a deal to sell a controlling stake in its Cloudary online literature unit, and its sale earlier this year of a controlling stake in its struggling Ku6 Media (Nasdaq: KUTV) online video unit. All of this comes as Shanda Interactive’s chairman and founder Chen Tianqiao looks to disband his empire that was an early leader in online entertainment, but later languished as it was overtaken by rivals like NetEase (Nasdaq: NTES) and Tencent (HKEx: 700). Read Full Post…
Bottom line: Shanda is likely to sell a controlling stake of its Cloudary online literature unit to an outside buyer, possibly Tencent, as part of a drive to hand over management of its major units to strategic partners.
Shanda’s Cloudary in rumored sale
The slow-motion break-up of former online entertainment high-flyer Shanda Interactive is back in the headlines, with reports the company has sold its online literature unit to Internet heavyweight Tencent (HKEx: 700). This particular rumor looks logical enough for reasons I’ll give shortly. But I’ve heard so many rumors about sale of part of all of Shanda over the past year that I’ll only believe this latest report when we hear an official confirmation. What’s clear from these latest reports is that Shanda founder and chairman Chen Tianqiao continues to look for opportunities to sell part or all of his company, as he reportedly grows restless with his lackluster businesses whose growth has stalled. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 7. To view a full article or story, click on the link next to the headline.
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Bright Food Targets Listing Cereal-Maker Weetabix By 2016 (English article)
More signs of turbulence are coming from the troubled online game space, with word that the CEO of Shanda Games (Nasdaq: GAME) has resigned and Perfect World (Nasdaq: PWRD) has overhauled its R&D division to breathe new life into the company. There’s quite a lot of back story to these latest news bits, including a strategic equity alliance announced by the 2 companies at the start of the year that later fell apart for unexplained reasons. The bigger story is the fierce competition in China’s online game market, which has left companies like Shanda and Perfect World struggling to grow and has dampened investor enthusiasm for new gaming IPOs. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 29. To view a full article or story, click on the link next to the headline.
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Big privatization deals are never easy, as we’re seeing with signs that a buyout plan launched by the controlling shareholder of online game firm Shanda Games (Nasdaq: GAME) is rapidly unraveling. Shanda Games’ parent, Shanda Interactive, launched the plan back in January, as part of a broader wave of similar privatizations for undervalued US-listed Chinese companies. Shanda Interactive is saying the buyout is still alive, though other shareholders are clearly growing skeptical, based on Shanda Games latest stock price. Read Full Post…
Two more US-traded Chinese firms are on the cusp of de-listing, with online game operator Giant Interactive (NYSE: GA) and chipmaker RDA Microelectronics (NYSE: RDA) just announcing they have wrapped up buy-out deals that will pave the way for their imminent privatization. These 2 de-listing stories were announced months ago and are completely expected. But the bigger underlying story is the lack of major new privatization announcements in the last half year. In a similar development, major new IPOs by Chinese firms in New York have slowed considerably since a boom of offerings in April and May, indicating the broader deal-making market may be entering a new, more stable phase. Read Full Post…
This week’s Street View takes us to Shanghai’s rapidly aging Maglev train, which was once the city’s pride and joy when it first opened in 2004 offering the world’s fastest speeds in a commercial rail service. The Maglev celebrated its 10th anniversary this year, even as debate grows about a technology that has been overtaken by slower but less costly high speed rail trains in the last few years. Read Full Post…
