SHANGHAI, March 15, 2016 /PRNewswire-FirstCall/ -- The9 Limited (the "Company," NASDAQ: NCTY), an online game operator, today announced that it has entered into a memorandum of understanding ("MOU") with L&A International Holding Limited, a Cayman Islands company with shares listed on the Growth Enterprise Market of the Stock Exchange of Hong Kong Limited under stock code 8195 ("L&A"), and certain other shareholders of Red 5, to exchange approximately 30.6% equity interest (the "Swapped Red 5 Interest") that it owns in its subsidiary Red 5 Studios, Inc. ("Red 5") for such number of newly issued shares of L&A which has the same value as the Swapped Red 5 Shares. The Company currently owns approximately 72.8% equity interest in Red 5. The other participating shareholders of Red 5 will exchange an aggregate of approximately 14.4% equity interest in Red 5 in the transaction on the same terms. The total consideration for the transaction for all the participating shareholders, including the Company, is expected to be approximately US$76.5 million, subject to adjustments by not more than 15% based on the result of the due diligence exercises to be conducted by the Company on L&A and by L&A on Red 5. The completion of the transaction is subject to the parties' execution of definitive agreements and customary closing conditions to be stipulated therein. Except for certain provisions relating to exclusivity, confidentiality, expenses, governing law and dispute resolution, the MOU does not constitute legally binding obligation on the parties to consummate the transaction.
Red 5 is an online game developer based in the United States. Red 5 is developing Firefall, a MMOFPS game, for which the Company has conducted a limited commercial release in China in November 2015 and expect to have a large-scale commercial launch in China in the second half of 2016. Red 5 has licensed Firefall to System Link for publishing and operating Firefall for a five-year term in China.
About The9 Limited
The9 Limited is an online game developer and operator in China. The9 Limited develops and operates, directly or through its affiliates, its proprietary MMO and mobile games including Firefall and Song of Knights. The9 Limited's joint venture with Qihoo 360 has obtained an exclusive license for publishing and operating Cross Fire 2 in China. The9 Limited also engages in mobile advertising and mobile app education businesses. The9 Limited has formed a joint venture with Shanghai ZTE to develop and operate home entertainment set top box business.
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 transaction 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.
For further information, please contact:
Ms. Wendy Weng Investor Relations Manager The9 Limited Tel: +86 (21) 5172-9990 Email: IR@corp.the9.com
SOURCE The9 Limited