China is the country where online game industry is fast developing now. T2CN is the leading online casual sports game company in China. Its distinctive feature is the most popular online sports game in the country – FreeStyle. Besides, the company has got such well-known partners as Coca-Cola, Nike and Nokia. It’s obvious that it makes T2CN extremely attractive in the game markets. As a result, the acquisition of majority ownership of T2CN Holding Limited by GigaMedia Limited has become known to the public.
By acquiring up to 18.3 million shares of T2CN (40.3%) GigaMedia are fulfilling their next step in building a dominant online platform in Asia and becomes a leader as “no other company has this kind of reach in Asia”. Having initial investment into T2CN in May 2006, GigaMedia also holds: convertible preferred shares of T2CN that can be converted into extra 15 million common shares of T2CN; an option to buy additional 4.3 million common shares of T2CN. As a result, the total ownership stake of GigaMedia is approximately 51.9%.
The total consideration of the acquisition amounts to $22.9 million, but it is subject to adjustment based upon T2CN financial performance in the first half of 2007. The payment is to be made in two trenches. One is expected to be in February 2007, and the other – in August 2007.