Phoenix founder sells stake for $1.1b

Hong Kong-based media group Phoenix Media Investment (2008) said its controlling shareholder and chairman Liu Changle has reached an agreement to sell a 37.93 percent stake, or 1.89 billion shares, to local property and transport conglomerate Shun Tak (0242) and state-backed publisher Bauhinia Culture (Hong Kong) for HK$1.16 billion.

Bauhinia will buy 21 percent of shares for HK$640 million, while Shun Tak (0242) has agreed to buy 16.93 percent of total issued shares for HK$516 million.

Pansy Ho Chiu-king, the daughter of late casino magnate Stanley Ho Hung-sun, is Shun Tak’s executive chairwoman.

The buying price of HK$0.6 per share represents an 11.6 percent discount over the last trading day.

Shares of Phoenix Media surged 12.86 percent to HK$0.79 yesterday while Shun Tak slid 0.40 percent to HK$2.47.

This came after media reports in February said Liu, the founder of Phoenix, and his family would step down from management to make way for Beijing-appointed executives.

The takeover is purportedly linked to the company’s financial borrowing crisis, affecting 70,000 people and involving almost 10 billion yuan (HK$12.15 billion). He Xin, the son-in-law of Liu, was detained by Chinese police earlier last month on suspicion of illegal absorption of public deposits.

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