UPDATE 1-Three PE firms back Sina $180 mln mgmt investment
HONG KONG |
HONG KONG Nov 27 (Reuters) - Sequoia Capital, FountainVest and CITIC Capital have agreed to finance a management-led plan to invest $180 million in China's leading Web portal, Sina (SINA.O), two people familiar with the plan said on Friday.
The parties reached agreement last week, and Sina is expected to announce the deal next week, said two people who are close to the deal and who spoke to Reuters on condition of anonymity because the deal has not been formally announced.
A Sina spokeswoman declined comment, saying the company does not comment on market rumours.
In September, sources told Reuters that Sina management was in talks with private equity funds to back a plan for them to buy about $180 million worth of shares in an effort to strengthen control of the company. [ID:nHKG258165]
The deal calls for Sina to issue 5.6 million new shares to an investment firm called New Wave, led by Sina's Chief Executive Charles Chao and senior Sina executives.
Details of the deal emerged after Sina failed to secure a merger with leading outdoor advertising firm Focus Media FMCN.O, as Beijing regulators held up their application for months.
A Sina, Focus merger would have created a privately held media firm large enough to challenge China's national broadcaster, CCTV.
The buy-in will help strengthen Sina management's hold on the company, and Sina said it will use the proceeds to finance future acquisitions and other corporate purposes.
The firm said earlier this month it will look at potential spin-offs of some of its specialised portals. [ID:nN16524819]
(Reporting by George Chen; Writing by Melanie Lee; Editing by Ken Wills)
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