Ku6 Media Company Ltd., the Internet video subsidiary of Shanda Interactive Entertainment Limited, has announced that the shareholders of Pipi.cn, a leading P2P Internet video platform in China, have agreed to sell all shares to Ku6 in exchange for 2,212,114,257 Ku6 ordinary shares.
On the completion of the transaction, Pipi.cn will become a wholly-owned subsidiary of Ku6.
However, the transaction will be subject to the condition that the shareholders of Ku6 approve the issuance of new ordinary shares to the shareholders of Pipi at its upcoming extraordinary general meeting. If approved, the transaction is expected to be completed in the second quarter of 2011.
Shanghai Shanda Networking Co., Ltd., a wholly-owned subsidiary of Shanda Interactive Entertainment Limited, is one of the early investors of Pipi and it holds a 32% stake in Pipi. Shanda Networking will sell its stake to Ku6 in this transaction. All selling shareholders of Pipi will enter into lock-up agreements for a period of 181 days to two years after the closing of the transaction.
Zhu Haifa, acting CEO of Ku6, told local media that they are glad to merge with Pipi, one of the best P2P Internet video platforms in China. After the merge, Ku6 will become the first Internet video company with large-scale operations in both browser and video player in China. The company is expected to continue to expand its market share, and increase the numbers of its users and advertisers.
