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Press Release Source: BroadWebAsia, Inc.
BroadWebAsia Proposes to Make Significant Investment in Linktone
Ltd.
Tuesday January 29, 5:49 am ET
Led by Chairman, Brad Greenspan, Founder of MySpace, BroadWebAsia
Proposes a Series of Financial and Strategic Transactions to Effect
Majority Share Position in Linktone
LOS ANGELES, Jan. 29 /PRNewswire/ -- BroadWebAsia, Inc. ("BWA" or
"the Company"), a leading online entertainment network in China
founded and chaired by Brad Greenspan, the founder of
MySpace, today disclosed that it has presented a formal
proposal for investment in, and restructuring of, Linktone Ltd.
(Nasdaq: LTON - News; "LTON" or "Linktone"), which it believes
offers superior value to the agreement recently entered into
between Linktone and PT Media Nusantara Citra (the "MNC
Transaction").
Under terms of the proposed BWA transaction, BWA or its affiliates
will purchase not less than 60% of Linktone's outstanding shares
using a combination of:
(1) a tender offer for approximately 25% of the total shares
outstanding
of Linktone, or 6.0 million existing American Depositary Shares
("ADSs"),
at a price of $4.18 per ADS; and
(2) a commitment to purchase $10 million of ADSs on the open market
at up
to $4.18 per share (assuming a $4.18 ADS purchase price, BWA
would
purchase 2.39 million ADS)
The BWA tender offer of $4.18 represents a 10% premium over the
price offered in the MNC Transaction.
Additionally, BWA has proposed to contribute certain BWA media
assets and strategic partnership arrangements to Linktone that it
believes will diversify Linktone's current business, increase
revenue streams and generate incremental cash flow, and thereby,
enhance shareholder value.
Brad Greenspan, chairman of BWA stated, "We believe that the BWA
proposal offers Linktone shareholders an opportunity to enhance the
value of their shares by introducing the necessary ingredients to
develop and execute an effective business plan for Linktone in 2008
and beyond. BWA's management team has a proven track record in the
media, mobile and internet industries. We would provide the
strategic leadership and counsel to the Linktone management team to
develop and implement an effective restructuring plan. We believe
we are the right partners to bring Linktone back to profitability
and increase value for shareholders through a China-focused
strategy that leverages the many growth opportunities presented by
this dynamic, emerging market."
Under the proposal, BWA also would be issued 15 million new
Linktone ADSs in exchange for:
i) BWA's contribution of the 'BWA Entertainment Group', which
consists
of a profitable entertainment company that creates, sells, and
offers its content across multiple media platforms and two
entertainment focused websites with over 10 million unique
visitors
per month including a casual game website. BWA believes there
is
significant upside for Linktone to leverage these assets to build
a
wireless internet entertainment portal to use the content for
creating mobile and television programming, and to diversify
its
advertising service strategy onto the internet.
ii) A 5-year commercial agreement that would allow the Linktone
Advertising Group the right to sell up to 25% of BroadWebAsia's
web
inventory. Linktone and BWA would share in the proceeds
generated.
iii) A 5-year commercial agreement that would allow Linktone to be
the
exclusive Mobile Content Partner for BWA Network's web
properties
with over 60 million monthly users.
iv) To help decrease sales and marketing costs for Linktone, BWA
would
contribute $10 million in promotional carriage for Linktone to
use
to launch new web & wireless products.
v) BWA would purchase at least $3 million in mobile and
television
advertising across the Linktone Advertising Service Group over
a
period of 36 months.
Finally, commensurate with the closing of the proposed BWA
Transaction,
Brad Greenspan will serve as Chairman of
Linktone and BWA will elect four additional directors to the
Linktone Board proposed by BWA.
BroadWebAsia believes that this transaction offers the potential to
deliver Linktone and its shareholders: (i) a business model focused
clearly on building a mobile and entertainment leader in China;
(ii) unique users and web assets; (iii) the internet "genes"
necessary to build large viral services that leverage distribution
and content (iv) an incentivized and motivated Board of Directors
with the ability to work with management to deliver shareholder
value.
About BroadWebAsia
Established in 2005 BroadWebAsia, Inc. (BWA) is a fast growing and
diversified internet company focused on Chinese online communities
and digital advertising. The company was started and is backed by
internet entrepreneur and MySpace Founder Brad Greenspan. Brad has
tremendous experience in creating/scaling internet platforms and
brands and has a proven track record of building value for
investors. By acquiring controlling interests in 7 fast growing and
well managed Chinese websites, BWA has built a powerful,
synergistic network encompassing video entertainment, social
networking, and community search websites supported by a top online
ad sales group in China. BWA's highly scalable network strategy
allows for efficient cross marketing, cross advertising and cross
audience promotion opportunities. The BWA Network reaches over 60
million unique visitors, generating over 600 million page
views.
Cautionary Note Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform
Act of 1995, and includes statements relating to the ability of
BWA, such as the ability improve efficiencies, improve customer
service, drive cost savings and competitive advantage. These
statements are based on current expectations and are subject to
risks and uncertainties and changes in circumstances. There are
important factors that could cause actual results to differ
materially from those anticipated in the forward looking statements
including, among others: the conditions of market, the continued
ability to develop solutions, demand for and market acceptance of
new and existing services, development of new functionalities which
would allow companies to compete more effectively.
Media
Kathy Price
Financial Relations Board
213-486-6547
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Source: BroadWebAsia, Inc.