Alibaba invests $804M in Chinavision Media Group Limited (1060)

Posted Mar 11, 2014

Alibaba has bought an $800 million stake in public company, Chinavision Media Group Limited (HKG:1060). Alibaba will own a majority of ChinaVision Media Group following the HK$6.24 billion ($804 million) investment. Alibaba is buying 12.5 billion new shares of ChinaVision for 50 Hong Kong cents (22% lower than the closing price of 64 Hong Kong cents before the stock was suspended from trading on February 25th).

The trading will resume tomorrow. Alibaba will gain access to ChinaVision’s TV dramas and films. ChinaVision’s current shareholders include Tencent, which is known for operating the WeChat mobile video application. Tencent competes with Alibaba in gaming and shopping. Alibaba is valued at around $200 billion and is considering an initial public offering.

Alibaba has posted its fourth quarterly profit gain on a surge in sales. Alibaba generates most of its revenue from commissions and advertising. The net income, attributable to ordinary shareholders, was $792 million for the three months ended September. This is a 12% increase from the June quarter. Alibaba’s revenue increased 51% to $1.78 billion.

[Source: Bloomberg]