58.com Shares Spike Higher Following Ganji.com, Tencent Deal Announcement

Shares of

58.com Inc (ADR)

WUBA

on Friday spiked to new 52-week highs after the company announced it has acquired a strategic stake in Falcon View Technology, the holding company Ganji.com, a major online local services marketplace platform in China in addition to a strategic investment from Tencent. As part of the deal, 58.com will acquire a 43.2 percent fully detailed equity stake in Ganji for a combination of share consideration and cash, including approximately 34 million newly issued ordinary shares of the Company and $412.2 million in cash. "We are pleased to make this large-scale strategic investment in Ganji.com to jointly realize major cost, revenue, and strategic business synergies," said Michael Jinbo Yao, Chairman and CEO of 58.com in a

press release. "This transaction is part of our larger plan to execute our vision of integrating our respective businesses and creating a larger and more effective local services internet platform to help consumers around China find the services that they need in their local area. Ganji.com has done a tremendous job building a talented team, and we look forward to working more closely with them as we continue to expand in this growing and underserved market." Concurrent with the transaction, Tencent has also signed a definitive share purchase agreement with 58.com to purchase approximately $400 million of newly issued ordinary shares from 58.com at a price equivalent to $52 per ADS. Once this transaction is completed, Tencent will hold an ownership stake of approximately 25.1 percent of 58.com. Both the 58.com-Ganji transaction and the Tencent investment are expected to close within a few days, subject to customary closing conditions.

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