- 58.com (NYSE:WUBA +5.2%) is buying a 43.2% stake in Chinese online classifieds rival Ganji.com for 34M shares (current value of $2.4B) and $412.2M in cash.
- The companies will "continue to operate their respective brands, websites and teams," while exploring ways to partner and "maximize business synergies." Following the deal, Ganji stands to own a 25% stake in 58.com.
- Messaging/gaming giant Tencent (OTCPK:TCEHY), which bought a 19.9% stake in 58.com last June, is investing another $400M in the company at a price of $52/share (27% below current levels). Tencent will own a 25.1% stake once the investment closes.
- The FT reported on Tuesday 58.com and Ganji.com were planning a full-blown merger, while adding (without providing details) the transaction would occur in two stages to appease regulators.
- After opening lower, 58.com has quickly shot higher. Shares are up 39% since the FT's report arrived.
- Yesterday: Morgan Stanley sees major 58/Ganji synergies
- Update (12:10PM): 58.com is now down 1.6% amid a broader market selloff.
- Update 2 (3:00PM): Shares have reversed course again. They're now up 3.9%.