Shanda makes an offer for Hurray!

Shanda to Take Over Hurray

Shanda Interactive Entertainment Inc. announced plans to launch a tender offer for 51% of fellow Chinese online-entertainment concern Hurray Holding Co. with the support of Hurray's board.

Shanda is offering $4 per American depositary share, a 25% premium to Friday's closing price. The shares bottomed out at 93 cents three months ago, but have surged since late April amid potential takeover efforts.

华友世纪将大幅裁员：或为出售铺路—Layoffs at Hurray! pave the way for sale

华友世纪将大幅裁员：或为出售铺路

有消息人士称，华友昨日下午已内部通知了裁员计划，补偿方案根据劳动法规定的补偿标准。据悉，此次裁员波及范围相当广，可能有大量员工在此次调整中被裁掉。

　　昨日晚间，有华友相关负责人证实了该公司将裁员的消息，不过该人士未披露此次裁员计划的细节。

截稿前，华友未就裁员计划发布公告，其裁员原因等仍有待披露。

Short translation:

A source at Hurray! told CNstock.com that big layoffs are coming at Hurray! The article goes on to say insiders believe it could mean a sale is coming.

Often times the layoffs are done after a sale, since new management decides who to hire and fire. This may indicate the company has burned through a lot of cash and needs to reduce operations, or it could mean that a sale is in the works, since Shanda would be most interested in Hurray!'s assets.

Along those lines, JLM Pacific Epoch has insider news about the deal:

An unnamed insider said that Shanda (Nasdaq:SNDA) has offered $3.25 per American depositary share (ADS) for about 80% stake in music production, artist development and wireless value-added services provider Hurray Holding Co, reports Sina.

More info at link.

Hurray! held up well in Wednesday trading, considering yesterday's run-up and the overall mood in the market. HRAY lost 6.6 percent.

Shanda in the News—盛大新闻

Shanda (SNDA) has some news today.
Shanda May Buy Service Provider Hurray!
Hurray! is up 27 percent on the news. Caijing reports a previous offer from another bidder was $3.50 per share, another 25 percent above the current price.

Investors like Shanda here as well, shares are up about 2.5 percent. Why might Shanda be interested?

The company [Hurray!] also provides a range of other WVAS to mobile users, including games, pictures and animation, community, and other media and entertainment services.

Shanda was rumored to be interested in the company in 2005.
盛大有望收购华友世纪

　盛大与华友世纪的渊源由来已久。2005年5月，当时如日中天的盛大刚刚开始自己的一系列收购，除了入股新浪，还收购了网络游戏平台浩方、手机游戏公司数位红等多家公司，华友世纪一度也是选择之一。但一位原盛大高管介绍，盛大董事长兼CEO陈天桥对于SP业务不看好，使他最终放弃了这一收购机会。
　　过去两年时间中，华友世纪原CEO王秦岱大举收购唱片公司，使公司由SP向娱乐音乐领域转型，但是并未取得期望中的成功。

Here's the reason why the company is attractive:

虽然过去已经有过多笔收购，但是目前华友世纪账上仍有超过5900万美元现金及等价物，华友世纪在音乐方面的收购布局也具有一定的商业价值，这也成为多家互联网公司看好华友世纪并希望控股的原因。

HRAY has about $59 million in cash. Market cap as of right now, up 25 percent to $2.75 per share, is $60 million. At $3.50, an acquirer would pay about $16 million net for a company with $54 million in declining revenue last year. However, the $60 million figure is from December 31, 2008, and the company lost $9 million in that quarter. The total figure at this time may be around $50 million, assuming business deteriorated at the same rate as Q4, which would raise the cost to around $25 million.

More from JLM Pacific Epoch:

Shanda may inject some of its online literature assets including Qidian.com, into Hurray for backdoor listing, reports Sohu quoting an unnamed insider.

Best Prospect Overseas Limited withdrew an offer of $4.00 per American depositary share to acquire a 51% stake in Hurray on May 8, saying that some Hurray board directors had refused to negotiate. A Sina source said that Hurray cut contact with Best Prospect after granting Shanda a one-month exclusivity period for negotiation.

Shanda looks as though they're playing the role of white knight. It'll be interesting to see if, and how much, they bid.

Best Prospect Overseas Limited isn't going away, they've written a letter to shareholders.