* Suning stake will be 44 percent of PPTV
* Deal values PPTV at $568 million
* Suning calls deal "strategic investment"
* Suning shares up 58 pct year-to-date
By Paul Carsten and Donny Kwok
BEIJING/HONG KONG, Oct 28 China's Suning
Commerce Group and Hony Capital, an affiliate of
Lenovo Group, will invest $420 million in PPTV, a
Chinese online TV services provider, Suning said in a statement
Suning will invest $250 million to buy a 44 percent stake in
PPTV and become its largest shareholder. It is believed Hony
Capital will make up the remaining $170 million although the
statement did not specify that. The deal values PPTV at $568
Trading in Suning shares was suspended on Monday and will
resume on Tuesday.
"It is a key step for Suning to become a fully Internetised
company and is an important step in speeding up its
transformation process," Suning Vice Chairman Sun Wei-min said
via microblog service Weibo.
Suning, which competes with GOME Electrical Appliances
Holdings Ltd backed by U.S. asset manager Bain
Capital, has been forced to rethink its business model and
expand into areas such as Internet services and e-commerce to
chase a growing number of Internet shoppers.
PPTV is the largest online TV service in China with more
than 340 million users and offers sports, entertainment, news
and other video content, according to its website ().
Online TV is gearing up to be hotly contested as Chinese
Internet firms like Alibaba Group Holdings, Baidu Inc
and Xiaomi Tech have all recently expanded into the business,
vying with more experienced companies like Sohu Inc and
Youku Tudou Inc.
Hony Capital is sponsored by Legend Holdings, the parent of
the Hong Kong-listed Lenovo Group, the world's number
one PC manufacturer.
According to Standard & Poor's Capital IQ database, Hony
Capital has invested in media and online TV businesses including
TV advertising production firm Beijing Galloping Horse Film & TV
Production Co Ltd, media company Happigo Home Shopping Co Ltd,
and iQIYI.com Inc, an online television and movie portal
operator in China of which Baidu owns a controlling share.
With the traditional PC sector on the decline, Lenovo has
accelerated its foray into mobile devices, rapidly rising to
become the No.2 smartphone vendor in China, the world's largest
Shares of Suning have soared nearly 58 percent so far this
year, outpacing a 6 percent drop in China's CSI300 Index