Shanda Interactive Entertainment Ltd will launch an initial public offering of its game business, which it plans to spin off, in the United States, the country's biggest game firm said yesterday in a statement.
Nasdaq-listed Shanda, which didn't reveal the timetable and financial details of the pending IPO, said the move is expected to help it develop other online entertainment business and enable the game division to be more focused.
"The purpose of the IPO is to pursue strategic opportunities in enhancing its (game division) leadership position in the online games sector," the Shanghai-based firm said in the statement.
Shanda has submitted a draft registration statement to the US Securities and Exchange Commission regarding the IPO of Shanda Games Ltd, a Cayman Islands company which is now wholly owned by it and operates the firm's online games business, Shanda said.
Shanda expects to remain Shanda Games' majority shareholder after the completion of the proposed IPO. The company took the IPO path following the success of Sohu.com in listing its game division, Changyou.com Ltd, on Nasdaq, analysts said. The stock got warm market response on its first trading day last month.
The game sector is still one of the most profitable in the Chinese IT industry despite the global financial crisis. The Chinese online games market is expected to hit 31.1 billion yuan (US$4.57 billion) this year, a 49.7-percent growth annually, according to iResearch Inc. Last year, the sector's revenue rose 52 percent to 20.7 billion yuan.
(Shanghai Daily May 26, 2009)