[Updated]Shanda Selling Two Gaming Subsidiaries

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After a buying spree over the past few years, Shanda, the Shanghai-based gaming vendor now started selling its assets. ZheBao Media (or 浙报传媒), a media group in China eastern Zhejiang province announced yesterday to acquire CGA.com.cn and GameABC.com for RMB 3.5 billion (310 million and 3.18 billion for each) from Shanda.

CGA is a leading Chinese electronic sports platform while GameABC is a popular board gaming portal. Shanda bought the two at US$ 20 million and US$ 56 million respectively in 2004, right before Shanda sold its shares publicly on NASDAQ.

Screenshot of GameABC.com

screenshot of CGA.com.cn

With more than 200 million registered users and a monthly active user base of over 12 million, CGA generated a profit of RMB 15.39 million on revenue of 58.85 million while GameABC which claiming 3 million monthly active users across all its portfolio platforms pulled in a profit of RMB 144 million on revenue of 401 million in last year.

The sell doesn’t sound quite right to many. How come a media company with no prior experience in managing any gaming business wants to buy – two – gaming companies at once. One speculation according to people close to Shanda is that the company has been showing greater interest in media practice lately. The selling might help Shanda became a shareholder of Zhebao Media.

Jiang Guoxin, GM of Zhebao Media is an independent directors sitting on the board of Shanda Games. The good connection between Shanda and Zhebao Media could be served as the foundation for their further and deeper cooperation. After got listed in China, Zhebao media is in active pursuit of new media business, the acquisition might do some help on that front. On the other hand, since Shanda utilized hordes of cash (about US$ 2.3 billion) to privatize the company, it might also be in need of money.

And let’s do not forget that Shanda always has a dream of becoming China’s Disney, still remember that couple years ago the company tried to buy Sina, the largest Chinese news portal? The deal fell apart due to Sina’s resistance, but the dream, never fades away.

 

Updated: Zhang Jing, SVP and spokeswoman of Shanda commented on the acquisition on Sina Weibo that “the deal will be forging a long-term, comprehensive cooperation between the two companies.” According to the Strategic Cooperation Memorandum signed by Shanda and Zhebao Media, they’ll be teaming up on many fronts like screen writing, digital reading, 3rd party payment solution, Shanda Online interactive online advertising service, sharing of clients, set up of JV and so forth. It seems that Shanda never ditched its Disney dream. In no need of explaining everything to shareholders now after its privatization, Shanda now is moving faster and closer to its  initial dream.