TOM Group, a Hong Kong Internet and media company, said it plans to spend about $200 million to buy out and delist its Internet unit TOM Online, an Associated Press report said.
The Associated Press report said theTOM Group cited a deterioration in the unit's performance because of a changing environment for cell-phone content providers in China. Tom Online sells news, games, ring tones and other content to cell-phone users.
The companies said in a statement the parent is proposing to buy out TOM Online at HK$1.52 ($0.19) a share in cash for the unit's Hong Kong-listed shares, and $15.564 in cash for each American Depositary Share, the report said.
TOM Group, which is controlled by Hong Kong tycoon Li Ka-shing, holds about 65.73% of TOM Online's shares, the report said.
The $200 million figure is based on the assumption that no outstanding TOM Online share options are exercised. If the options were to be exercised, TOM Group would have to spend about $226 million for the buyout.The parent company said it intends to finance the buyout with loans from financial institutions, but it didn't give further details, the report further said.