Shanda Media, the controlling shareholder of Ku6, will sell a 41% stake in this Internet video company to Xu Xudong, founder and controlling shareholder of Sky Profit.
Sky Profit is registered in Cayman Islands and it operates iSpeak, a social platform that allows users to engage in real-time online group activities through voice, text and video. Lei Jun, non-executive director of Kingsoft, is a major shareholder of this company. Early in 2008, Kingsoft acquired about 30% stake in Sky Profit for USD8 million and the two parties established a strategic cooperation.
According to latest files from the U.S. Securities and Exchange Commission, Shanda owns about a 70.5% stake in Ku6. The transaction is expected to be completed by April 30, 2014.
The consideration for the sale shares will be determined based on the lower of the market price of Ku6's ADSs during the seven consecutive business days immediately prior to the closing of the transaction and the closing price of the company's ADSs on the closing date. Xu will complete the acquisition via a loan from Shanda Media, which will be secured by a pledge of all Ku6's shares beneficially owned by Xu.