Rumor: Kingsoft CEO Sells Shares to Finance Westhouse MBO
Tencent Tech, 3/28/11
According to an industry source, Kingsoft (3888.HK) CEO Zou Tao recently sold off a large number of company shares, but contrary to previous industry rumors, Zou is not dumping stock and then leaving the company, but rather selling the shares to complete a management buy out of online gaming subsidiary Westhouse.
The approximately HKD 189 mln for Westhouse's buyout will not come directly from Westhouse's 26 employees; instead, approximately 80% of the funds, or roughly HKD 150 mln, will come from a loan from Westhouse's parent company, Kingsoft. Westhouse management will raise the remaining 20% (approximately HKD 38 mln) of the funds needed for the buyout.
Zou has reportedly sold the shares in order to raise his portion of the funds needed to buy out the remaining 20% stake in Westhouse, however Kingsoft has declined to comment on this issue.
Editor's Note: For more background on this topic, please see "Kingsoft Restructures Game Studios into New Subsidiary" MD 1/24/11 and "Kingsoft Games to Spin Off Other Studios Through MBOs" MD 1/25/11 issues.
Keywords: online gaming Westhouse Zou Tao Kingsoft MBO Internet 3888.HK HR
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