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July 28, 2013
19:11 EDTGAMEShanda Games to acquire platform-related affiliates to bolster mobile strategy
Shanda Games announced that it has entered into definitive agreements to acquire affiliates providing user and payment platform services from its parent company Shanda Interactive Entertainment Limited . The aggregate consideration for the transaction is $811.5M, subject to closing adjustments and payable in a combination of cash, deferred payments and settlement of an outstanding loan receivable from Shanda Interactive. Shanda Games' cash, cash equivalents, short-term investments, and restricted cash, net of loans and dividend payable, totaled $556M as of March 31. Mr. Tianqiao Chen, Chairman of Shanda Games' board, commented, "In addition, this transaction removes two cost components from our cost structure and is projected to improve our EPS by approximately 40-50%. It puts our large cash position to a much better use and also eliminates two recurring related-party transactions and settles an outstanding loan receivable from Shanda Interactive. More importantly, the transaction will enable Shanda Games to become a truly integrated online gaming company. With an in-house customer service team and the control of customer database and distribution channels, Shanda Games will be able to enhance game players' experience and to reach out to users more efficiently." The transaction, which is subject to customary closing conditions, is expected to close in Q313.
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