Chinese Game Developer Giant to Buy Back up to USD288 Million in Shares
Liao Shumin
/SOURCE : Yicai
Chinese Game Developer Giant to Buy Back up to USD288 Million in Shares

(Yicai Global) Oct.19 -- Chinese game developer Giant Network Group has set out plans to repurchase between CNY1 billion (USD144.2 million) and CNY2 billion in social public shares as part of a new reorganization arrangement.

Giant will buy back the shares, priced at up to CNY25 (USD3.6) each, via centralized bidding with capital coming from its own funds or self-raised funds, the Shanghai-based firm said in a statement.

Shares in the developer have been suspended since Sept. 16 after investors voiced their opposition to a proposed acquisition of Israeli game company Playtika on Sept. 14. The move brought widescale changes to Giant's restructuring plans.

It is worth noting that the stock repurchasing price cap of CNY25 almost one-third higher than Giant's [SHE:002558] closing share price of CNY19 per share from Sept. 14, the final trading day before the suspension.

It is estimated that at least 80 million shares will be repurchased if all funds are used under the above conditions, accounting for some 4 percent of the company's total current issued share capital, and 18.7 percent of its current circulating shares.

The price is reasonable and fair and the repurchase will not have a significant impact on operations, finance and future development, nor will it affect the firm's listing status, Giant Network said in the statement, adding that there will be no damage to the legal rights and interests of the company and shareholders.

Giant Network landed on the A-share market through a reverse merger in 2015. It then entered the internet finance and internet medical fields. The company's operating income for the first half of this year was CNY2 billion, while net profit attributable to shareholders was CNY710 million.

Chairman Shi Yuzhu, who proposed the buyback has taken to Weibo recently to speak out on turmoil facing him and his company.

"I have recently suffered threats to my personal security and been the subject of online rumors," he said. "These rumors have been fabricated to deliberately bring down Giant Network's reputation, the company has reported the case to the police and we will firmly use the law to defend the legitimate rights and interests of the company and investors."

Stock prices of most A-share listed game companies have fluctuated since September due to new regulations suspending game publishing activities. Online gaming firms in China are facing intense social and public pressure and the government is continually tightening regulations governing the capital markets.

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Keywords: Giant Network Group Co. , Share Repurchase , Equity Incentive