* Disney-led consortium in talks to buy into Bus Online
* Google among investors in Disney consortium
* KFC to partner with Bus Online in 2,000 restaurants
(Adds KFC deal, Disney and Google's China business)
By George Chen and Melanie Lee
HONG KONG/SHANGHAI, Feb 8 A consortium led by
Walt Disney Co (DIS.N) is in advanced talks to buy into China's
largest in-bus digital media and advertising company, a deal that
could offer the U.S. entertainment giant a new platform to
promote Mickey Mouse in China, three sources told Reuters.
Google Inc (GOOG.O), the world's No.1 Internet search
company, which threatened to quit China last month over
censorship and hacking concerns, was among investors in the
Disney-led consortium, the sources said on Monday.
The consortium planned to buy a stake of between 30 and 40
percent in Bus Online for more than $100 million via a purchase
of old and new shares to be issued by the company in private
placements, said the sources.
"Disney wants to be a strategic partner not just a financial
investor in Bus Online as Disney is going to do many things in
China -- for example, the theme park to be opened in Shanghai,"
said one of the sources. "To Disney, the deal is not just about
sharing in the growth of China's advertising market but more
about the promotion of Disney, the brand itself, and this is
strategically important to Disney in China."
In November, Disney's (DIS.N) made a breakthrough deal to
build one of its signature theme parks in Shanghai, marking a
major advance for Western media and entertainment companies
seeking to crack the tough Chinese market. [ID:nN03523281]
Senior executives of Disney are expected to fly to Beijing to
meet Chinese media regulators to discuss Disney's long-term
development plan in China including the Bus Online deal, said
another of the sources.
GOOGLE IN FOCUS
In the wake of it's recent problems in China, Google is
finalising a deal that will let the U.S. National Security Agency
(NSA) help it investigate a corporate espionage attack that may
have originated in China.
Beijing has already warned Washington not to make the Google
incident political, in addition to other growing sources of
friction between the two nations, including Tibet, Taiwan, yuan
appreciation and Sino-U.S. trade.
Google was expected to take only a small stake in the Bus
Online deal, while Disney aimed to take the greater part, said
the sources, adding that no agreement had been signed yet.
The sources briefed on the possible deal declined to be
identified as the negotiation process is confidential. Bus
Online, headquartered in Shanghai, declined to comment.
A Google spokeswoman said the company could not immediately
comment. Disney could not be immediately reached for comment.
Bus Online is China's No.1 in-bus digital media and
advertising company, with revenue of about 314.5 million yuan
($46.07 million) in 2009.
Since 2004, the company has received a total of $80 million
from venture capital funds and banks including IDG, Yangtze Fund,
China Renaissance Capital Investment and CCB International.
Bus Online is the exclusive partner of state broadcaster CCTV
and the official Xinhua news agency for in-bus media content and
Yum! Brands' (YUM.N) fried chicken restaurant chain KFC would
sign a deal with Bus Online to allow the Chinese company to set
up screens in KFC's more than 2,000 outlets across China, said
Disney expected to provide media content to Bus Online for
its partnership with KFC in China on the condition that Disney
and Bus Online agreed on the equity stake investment first, they