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Besttone to Wholly Acquire China Telecom's Mobile App Store Subsidiary

Besttone Holding, 7/28/17

Online travel booking service provider Besttone Holding (600640.SH) has announced that the company plans to wholly acquire E-Surfing Space Technology, operator of mobile app store E-Surfing Space.

Telecom operator China Telecom Corporation (NYSE: CHA; 0728.HK), which is the sole shareholder of E-Surfing Space Technology, will sell E-Surfing Space Technology to Besttone, which is owned as to 70.89% by China Telecom Corporation's parent China Telecommunications Corporation. China Telecom Corporation also owns a 4.13% stake in Besttone.

Initial estimates of the transaction price are no more than RMB 250 mln, which will be paid in cash from Besttone's current capital reserves.

E-Surfing Space Technology primarily engages in content operations and advertising through its E-Surfing Space and Yishangdian brands. E-Surfing Space is a comprehensive mobile app store mainly focusing on China Telecom customers, but with peripheral support for users of competing telecom operators, such as China Mobile (NYSE: CHL; 0941.HK) and China Unicom (NYSE: CHU; 0762.HK; 600050.SH). Yishangdian is an entertainment and gaming app store focused on the all-network mobile market, and developing clients through third-party channels.

Operating revenue for E-Surfing Space Technology in 2015, 2016, and Q1 2017 was RMB 88.337 mln, RMB 118.557 mln, and RMB 34.114 mln, respectively, with net profits of RMB 42.669 mln, RMB 29.799 mln, and RMB 13.826 mln, respectively.

Editor's Note: For more information on this topic, please see "China Telecom Solicits Outside Investment for Subsidiaries," MD 5/13/14 issue.

Keywords: wireless app store China Telecom 0728.HK 600640.SH CHA E-Surfing Space Besttone Holding M&A Yishangdian

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