Shanda to spin off online game business, source

Fri. April 17, 2009; Posted: 04:45 AM

Apr 17, 2009 (Xinhua via COMTEX) -- IELSF | Quote | Chart | News | PowerRating -- BEIJING, April 17 (InfoChina)-Chinese online game operator and developer Shanda Interactive Entertainment Ltd. (SNDA.NASDAQ) has decided to spin off its core web game business in a public listing before this year's end, sources familiar with the matter disclosed earlier on Thursday.

The plan is part of Shanda's long-term scheme in becoming a holding company, noted the source, saying that Shanda, after this separation, will list its online business and web literature business step by step.

According to the source, the plan is undergoing internal scrutinization. An anonymous source from Shanda's staff confirmed that as early as two-month prior, investors had been visiting the company to discuss the spin-off deal.

Market watchers bet that Shanda is likely to list on the Nasdaq stock market, home to a cluster of Chinese online game operators. Its underwriter may be one of the three investment banks, Citibank, JP Morgan or Goldman Sachs.

Currently, Shanda's wholly owned subsidiary Shanda Games Ltd., the online game division, is concentrating on the commercial operation of Avion, a massively multiplayer online role-playing game, to pave the way for the spun-off web game business of Shanda, said the source.

Avion, very similar to Blizzard Entertainment's World of Warcraft, was developed by Korean game runner NCSoft. Shanda Games Ltd. won the exclusive operating rights in China and is strongly expecting the game to be a groundbreaking move for the company.

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