SHANGHAI, April 10, 2017 /PRNewswire/ -- The9 Limited (the "Company" or "The9") (NASDAQ: NCTY), an online game operator, today announced that it has entered into a term sheet with each of IE Limited, and Ark Pacific Capital Management Limited, a company incorporated in Hong Kong ("Ark Pacific"), for the issuance and sale of a total of 25,000,000 ordinary shares of the Company, each with par value US$0.01, to IE and Ark Pacific for a total consideration of US$30 million, or US$1.2 per share (the sale to each of IE and Ark Pacific, a "Transaction"). Each of IE and Ark Pacific will subscribe for 50% of the total shares to be issued (i.e. 12,500,000 shares) under the Transaction. IE will pay for its part of consideration with its stake of an online marketing platform Smartposting, while Ark Pacific will pay for its part of consideration in cash. The9 expects that this Transaction with Smartposting will create synergies between The9's business and Smartposting's business.
Pursuant to the term sheet with Ark Pacific, the shares to be subscribed by Ark Pacific will be subject to a redemption right. Both parties agree that if the Company's ADS market price is below US$4 for a specified period of time during the second year after completion of the Transaction, Ark Pacific can exercise its redemption right. The proceeds from this Transaction with Ark Pacific will be deposited at a bank account held under the name of the Company, which will be used to secure the Company's payment of redemption price upon any exercise of the redemption right.
The completion of the each Transaction is subject to the parties' execution of a definitive agreement and customary closing conditions to be stipulated therein. Subject to satisfaction of due diligence by The9 on Smartposting and receipt of board and shareholder approvals, if required, the term sheet with IE is legally binding. Except for the confidentiality provision, the term sheet with Ark Pacific does not constitute legally binding obligation on the Company or Ark Pacific to consummate the Transaction.
About The9 Limited
The9 Limited is an online game developer and operator in China. The9 develops and/or operates, directly or through its affiliates, its proprietary mobile games and web games, including CrossFire new mobile game, Audition AR and Soul Awake. The9's joint venture has also obtained an exclusive license for publishing and operating CrossFire 2, which is under development by a third-party game developer, in China. The9 also engages in mobile advertising and mobile app education businesses.
About IE Limited
IE Limited operates an influencer marketing platform and Webtoon game developer. IE seeks to promote marketing solutions with the best return for advertisers and deliver the most enjoyable gaming experience. Based on intelligence generated from its influencer marketing platform, IE Limited develops games in-house and subsequently advertise via the most effective channels on its platform.
Smartposting is the No. 1 influencer marketing platform in Korea. SmartPosting trusts that influencers know their audience best and empowers them to lead the entire process, resulting in highly effective advertising campaigns. Smartposting has an experienced management team and mature in-house technology which enables it to gain valuable customer insights useful for optimizing campaigns.
About Ark Pacific
Ark Pacific is an alternative asset manager in Asia with a focus on Greater China. Through innovative and flexible approach to capital structure, Ark Pacific invests with entrepreneurs and management teams to create long-term value. Ark Pacific manages Ark Pacific Special Opportunities Fund I, L.P., which is a private equity special situations fund.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, statements about the potential transactions may constitute forward-looking statements. Statements that are not historical facts, including statements about The9's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, political and economic policies of the Chinese government, the laws and regulations governing the online game industry, information disseminated over the Internet and Internet content providers in China, intensified government regulation of Internet cafes, The9's ability to retain existing players and attract new players, The9's ability to license, develop or acquire additional online games that are appealing to users, The9's ability to anticipate and adapt to changing consumer preferences and respond to competitive market conditions, and other risks and uncertainties outlined in The9's filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 20-F. The9 does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
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SOURCE The9 Limited