Goldman Sachs buys stake in Shanda's IPO-bound e-book unit
Staff Reporter 2013-07-15 09:28
Cloudary's e-book platform. (Internet photo)
Cloudary, an e-book platform subsidiary of Chinese online gaming and entertainment company Shanda Interactive Entertainment, has seen its estimated value fall to less than US$600 million over the past year from US$800 million as the market waits for its long-awaited New York initial public offering, reports the Beijing-based Economic Observer.
Goldman Sachs, originally the underwriter of Cloudary's listing, is now a private equity investor, having bought a 20% stake in the subsidiary last month, the paper said, citing an unnamed insider. However, both Goldman Sachs and Cloudary have declined to comment on the reports.
Cloudary's IPO plan may be affected by the recent departure of several company executives and the development of Goldman Sachs now being a private equity investor. It is the first time that Shanda has introduced an outward PE investor, the paper said.
The company hopes its IPO plans can raise US$200 million but has delayed its listing due to current market conditions. However, insiders said that if Cloudary goes through with the listing, it will have understand that it will receive a lower pricing and projected value.
Goldman Sachs had been in talks with Shanda about investing in Cloudary for almost half a year. Shanda previously insisted that Cloudary was worth at least US$800 million and could not reach an agreement until last month, according to an insider.
The investment of Goldman Sachs will inject funds into Cloudary and help it to strengthen its leading edge over other competitors, provide greater benefits to its writers and help it to recruit more, the Economic Observer said.
