SHANGHAI, April 28, 2016 /PRNewswire/ -- The9 Limited (the "Company", NASDAQ: NCTY), an online game operator, today announced that it has signed a definitive agreement (the "Agreement") 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 equity holders of Red 5, to exchange approximately 30.6% equity interest (on a fully diluted basis, the "Swapped Red 5 Interest") that it owns in its subsidiary Red 5 Studios, Inc. ("Red 5") for 153,896,387 newly issued shares of L&A. The Company currently owns approximately 63.4% equity interest in Red 5 on a fully diluted basis. The total consideration for the transaction for all the participating equity holders, including the Company, is approximately US$76.5 million, implying Red 5's valuation at US$170 million. The completion of the transaction is subject to customary closing conditions stipulated in the Agreement.
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.
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 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. Connie Sun
Investor Relations Specialist
Tel: +86 (21) 5172-9990
Email: [email protected]
SOURCE The9 Limited