* Hony in talks to invest in up to $500 mln equity tranche
backing buyout -sources
* $2.8bln Giant buyout would be 2nd biggest ever of a
U.S.-listed China co
* China online gaming market grew 32.9 pct in 2013, expected
to double by 2016
By Stephen Aldred
HONG KONG, Feb 12 Chinese buyout firm Hony
Capital is in advanced talks to join Baring Private Equity Asia
consortium's $2.8 billion bid for online gaming company Giant
Interactive Group Inc, two people with knowledge of the
matter told Reuters.
Hony Capital, a private equity arm of Lenovo Group Ltd
, is in discussions to invest in an equity tranche of
up to $500 million to partly fund the acquisition, the people
Baring, Giant Interactive spokesman and Hony all declined to
comment. The sources declined to be identified as the
discussions are private.
The consortium needs around $1.5 billion to buy the 52.8
percent of Giant they do not already own. The consortium is also
raising an underwritten loan to finance the buyout, Thomson
Reuters publication Basis Point reported on Wednesday.
In November, Giant's Chairman Yuzhu Shi and Baring offered
to take the company private. The buyout would be the
second-largest of a U.S.-listed Chinese firm after a Carlyle
Group consortium acquired Focus Media for $3.7 billion in
Giant said on Tuesday it was selling its stake in Alibaba
Group Holding Ltd to a Tiger Global fund for
roughly $199 million, but did not disclose further details.
Shares of Giant had risen 87 percent for the year ahead of
the buyout proposal, as the popularity of online games soars in
China. China's online gaming market grew 32.9 percent to 89.16
billion yuan in 2013, and is expected to double in size by 2016,
according to China-based research firm iResearch.
Giant's stock closed at $11.13 on Monday, 5.3 percent below
the offer price.
Hony is China's second largest private equity firm, having
raised $6.9 billion for investments in the last 10 years,
according to data company Preqin.
In August, Hony was part of a consortium that agreed to pay
$495 million to buy U.S.-listed China company Simcere
Private equity firms have been active in buyouts of Chinese
companies listed in the United States, backing 31 of the 59
announced deals since 2010, according to Thomson Reuters data.