Rumor: Shanda Acquires Ku6
Sina Tech, 11/25/09
Reliable industry sources have revealed that Chinese online game developer and operator Shanda (Nasdaq: SNDA) has reached an acquisition agreement to acquire online video site Ku6 at a valuation of USD 44 mln in exchange for shares of Shanda subsidiary Hurray (Nasdaq: HRAY). Individuals involved in the matter from both parties have remained silent with regard to the rumor. Earlier reports today said that Shanda and Ku6 had reached an acquisition agreement a week ago, while detailed information on the matter would be announced soon.
Industry sources close to the matter said that Ku6 CEO Kevin Li (Li Shanyou) would stay on after the acquisition, which would be effectively equivalent to an indirect public listing for Ku6 through merger with Hurray, positioning Li in a key role in the listed company.
Li said that Ku6 revenues for this year are set to exceed RMB 100 mln, definitely reaching profitability by next year. Li also added that video advertising is likely to account for a third of the entire online advertising market, reaching a market scale of up to RMB 6 bln in 2010.
Editor's Note: Li declined to comment on the acquisition rumor, saying only that a public announcement would be made at an appropriate time.
Sohu also reported that Ku6 would merge with Hurray to form a new company. After restructuring, Li Shanyou would serve as president of the new company while becoming its largest individual shareholder, holding a stake second only to the shares owned by Shanda. The new company will engage in three main businesses: Ku6's online video, Shanda's music services, and Hurray's WVAS business.
Keywords: corporate restructuring Shanda Kevin Li Internet funding online advertising online video Ku6 video advertising SNDA Hurray WVAS HRAY online gaming M&A
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