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- The9 Limited
, today announced that it has
entered into a memorandum of understanding ("MOU") with L&A International
Holding Limited, a Cayman Islands company with shares listed on the Growth
Enterprise Market of the Stock Exchange of Hong Kong Limited under stock code
8195 ("L&A"), and certain other shareholders of Red 5, to exchange approximately
30.6% equity interest (the "Swapped Red 5 Interest") that it owns in its
subsidiary Red 5 Studios, Inc. ("Red 5") for such number of newly issued shares
of L&A which has the same value as the Swapped Red 5 Shares. The Company
currently owns approximately 72.8% equity interest in Red 5. The other
participating shareholders of Red 5 will exchange an aggregate of approximately
14.4% equity interest in Red 5 in the transaction on the same terms. The total
consideration for the transaction for all the participating shareholders,
including the Company, is expected to be approximately US$76.5 million, subject
to adjustments by not more than 15% based on the result of the due diligence
exercises to be conducted by the Company on L&A and by L&A on Red 5. The
completion of the transaction is subject to the parties' execution of definitive
agreements and customary closing conditions to be stipulated therein. Except for
certain provisions relating to exclusivity, confidentiality, expenses, governing
law and dispute resolution, the MOU does not constitute legally binding
obligation on the parties to consummate the transaction.
Red 5 is an online game developer based in the United States. Red 5 is developing Firefall, a MMOFPS game, for which the Company has conducted a
limited commercial release in China in November 2015 and expect to have a
large-scale commercial launch in China in the second half of 2016. Red 5 has
licensed Firefall to System Link for publishing and operating Firefall for a
five-year term in China.
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