华尔街日报
华友控股与光线传媒已经达成合并协议
Cellphone ring-tone provider Hurray Holding Co. and television producer Enlight Media Ltd. agreed to combine operations in a deal valued at about $160 million, according to people familiar with the matter.
Under the pact, Hurray, which is traded on the Nasdaq Stock Market, would change its name to Hurray Enlight Media Group Ltd. The new entity would be 42%-owned by the current owners of Enlight, whose chief executive would run the combined company.
The deal aims to wed Enlight's content business with Hurray's distribution channels and music labels to create one of China's largest independent media-content companies. Both companies are based here.
The deal underscores the increasing pressure for Chinese service providers such as Hurray to rethink their strategies as the nation's leading carrier, China Mobile Ltd., pushes into the wireless Internet sector.
Providing mobile value-added services such as ring tones is considered to be a rapidly diminishing business in China because carriers and content providers are moving in on the market. While Hurray and other companies like it once were considered to have great promise, most have reported declines or losses in the past year and are attempting to move into the content business.
China has more than 500 million mobile-phone subscribers, with the lion's share being China Mobile customers. The carrier sporadically creates new rules that industry insiders say severely affect independent service providers, such as changing payment structures for data downloads and promoting its own wireless Web portal, Monternet, by warning users that they will be charged for data use outside it.
Though China Mobile continues to add to its user rolls, the growing number of people accessing the Internet through their cell phones suggests that an expanding portion of future gains will be derived from data services.
China Mobile is 'increasingly looking to vertically integrate [its] own value chain,' said Fan Bao, chief executive of China Renaissance Partners, the investment bank that introduced the companies and acted as an adviser on the transaction. 'That eliminates the growth for service providers; that was a disappointment.'
Hurray has been struggling and cited regulatory changes when it reported a 20% decline in revenue to $14.6 million in the second quarter from a year earlier. Although the company has made gains from proprietary content -- including music from its record labels -- revenue from the bulk of Hurray's business, mobile value-added services, has continued to drop. Because the company has made little use of the cash raised from its initial public offering in 2005, its value by equity is less than $30 million, even though its total market capitalization is more than $92 million.
It makes sense for service providers to move into the content business to revive their businesses, Enlight officials said. 'Service providers can't survive' on their own, Enlight Chief Executive Wang Changtian said. 'But moving from a content business to a service-provider business is much easier than the other way around.'
Mr. Wang had been waiting to take Enlight public and said the deal will provide the growth he is seeking, in addition to important assets like Hurray's distribution channels and its record labels, Huayi Brothers Music and Freeland Digital Music.
Hurray declined to comment. Its stock price, which has been declining for most of the year and reached a 52-week low of $3.32 in August, was up 1.7% at $4.32 in late-morning trading yesterday.
Under the terms of the transaction, Enlight's current owners will be able to raise their holdings in the company to 65% of shares outstanding if the share price reaches $8.50 within two years of the deal.