SHANGHAI, China-Internet game operator Shanda Interactive Entertainment Ltd. caught the attention of the Chinese wireless market after announcing it had taken a 19.5-percent stake in wireless media firm Sina Corp.
The $230 million acquisition, which was revealed in a Securities and Exchange Commission filing mid-month, surprised analysts, who said it was most likely completed without Sina’s knowledge. Shares of both companies spiked following the news-Sina showed the most marked increase, up 21 percent, and rivals NetEase and Sohu jumped as well.
Shanda indicated it may consider increasing its stake in the cross-town wireless company, and some believe the transaction could spark a bidding war for Sina, which offers mobile news and other online content. Sina responded by adopting a shareholder rights plan.
Sina stock dropped earlier this year after its fourth-quarter results revealed it had been generating revenues from services like fortune-telling and astrology, which have been effectively banned by the Chinese government. Shanda, on the other hand, has been recording solid numbers. A merger between the two could result in the nation’s first major Internet/wireless conglomerate, with combined 2004 revenues of $365 million.
Foreign companies such as Yahoo! are also said to be interested in Sina, but any such deal would likely face heavy scrutiny from Chinese regulators.
