CDC Corp, PE Firm Offer to Take 19.9 Percent Stake in Linktone

Chinese PE firm Lunar Capital Management has partnered with CDC Corp. (formerly chinadotcom) to bid on a 19.9 percent stake in Linktone, a Chinese provider of wireless value added services. In addition to the all-cash investment in the company, which is still suffering from regulatory changes, the potential investors are proposing a three-point restructuring plan:

— Restructure the core wireless VAS business through cost cutting, product refocus and better partnerships
— Restructure new-media assets into a standalone entity.
— Build a pipeline of transformative transactions, taking advantage of the investors’ resources.

The companies say they will pay a premium for preferred shares, but would be looking for a discount on common shares. Based on Linktone’s (NSDQ: LTON) current market cap of $57.9 million, the investment would come to somewhere around $11.5 million. There’s been no official response from Linktone as of yet. (Release)

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