Boston, MA 04/02/2014 (wallstreetpr) – Ku6 Media Co Ltd (ADR) (NASDAQ:KUTV) announced that the controlling shareholder of the company, Shanda Media, made an agreement for share purchase with Xu Xudong on Monday.
According to the agreement with Xu Xudong, which Shanda Media signed on March 31, Ku6 Media will sell as many as 1.94 trillion ordinary shares of the Chinese online video company. The sell off will amount to almost 41% of the company’s capital encompassing both -outstanding and issued shares. As of now, Shanda Media holds as much as 70.5% shares of the company. The transaction is forecasted to complete by April 30, 2014.
About Xu Xudong
Xu is the founder of Sky Profit Limit, where he is also the controlling shareholder. Sky Profit Limit iSpeak, which is social platform which enables users to indulge in live online group activities by means of video, voice and text.
The average consideration for the sale of shares to Xu will be calculated according to the lower market price of Ku6 Media Co Ltd (ADR) (NASDAQ:KUTV)’s ADSs during the one week period immediately after the closing of transaction. It will also depend on the closing rate of company’s ADSs on the last day of the seven consecutive business days.
Funds For Purchase
Xu seeks to fund the purchase amount by availing loan assistance from Shanda Media. The loan will be secured by an assurance of all the shares of company which Xu beneficially owns.
After the announcement, Ku6 Media Co Ltd (ADR) (NASDAQ:KUTV) was noticed to climb by 48.6% and had reached $3.12 on Tuesday. Analysts at The Wall Street have rated the company a “sell”, while attaching a ratings score of D to the shares of the company. Their analysis has been driven by multiple factors including underperformance of the company which had reported a decrease in net income by 5.8% as compared to the results of the same quarter in the last quarter.
