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September 5, 2009

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Shanda to list game unit on Nasdaq

SHANDA Interactive Entertainment Ltd plans to spin off its game unit and list it in the United States to raise up to US$800 million in an initial public offering.

The game unit, which accounts for more than 95 percent of Shanghai-based Shanda's income, will trade on Nasdaq, China's biggest online game firm said in a regulatory filing yesterday.

Shanda plans to use the proceeds from the IPO to fund expansion, the filing said.

At present, Shanda operates 18 MMORPG (massive multiplayer online role playing game) and 11 casual games, including popular title Aion.

The game unit earned a net profit of 671 million yuan (US$98.6 million) in the first half of the year, against 383 million yuan a year ago. It generated revenue of 2.19 billion yuan from January to June against 1.54 billion yuan a year ago.

Shanda's plan for an IPO follows rival Sohu, which spun off its game unit Ltd and raised about US$138 million through an IPO in April.

Shanda will become a diversified media business covering many sectors besides games, its chairman said previously.

Shanda has developed online literature and interactive music and video sectors. It will also enter the e-book market, which allows users to read via a specific reader device, like Amazon's Kindle.

In 2013, China's online game revenue will hit US$5.8 billion, more than double the US$2.7 billion last year, said IDC, a US-based IT research firm.



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