Shanda Gains Control of Hurray!

Shanda Interactive Entertainment Ltd. (SNDA - Snapshot Report) announced the expiration and preliminary results of the tender offer for Hurray! Holding Company Ltd. (HRAY - Analyst Report). Hurray! is a leader in music-related products and digital download content in China.

After the acquisition of Hurray! shares (including those represented by ADS) in the tender offer, Shanda will hold approximately 51% of Hurray!'s total outstanding shares, calculated on a fully diluted basis, for a total consideration of nearly $46.2 million.

Hurray! has strategically transformed itself into a leading entertainment content and distribution company that extends well beyond wireless download solutions. Primary focus is now on the recorded music and mobile gaming businesses. Hurray! has successfully implemented sales promotions for its new music-based services, with content ownership, over both Internet and wireless platforms.

Hurray!-affiliated music companies, including Huayi Brothers Music, Freeland Music, New Run Entertainment, Secular Bird, and Seed Music, are earning higher revenue for the company, while aiming to control 25% music market share in China over the next 2-3 years. The affiliated music company released a series of new songs including 6 albums, 2 EPs, and 1 single. Hurray! is also developing pop concerts operation capabilities. The company is expecting encouraging business from this avenue.

During the first quarter 2009, Hurray! launched 9 new mobile games and mobile themes for China Mobile's (CHL - Analyst Report) portal and is expected to launch another 9 new mobile games and mobile themes during the second quarter.

SNDA is a leading wireless value-added service (WVAS) provider in China with a diversified portfolio of entrainment content. The Chinese WVAS market is expected to generate $11.5 billion of revenue in 2012.

We believe the acquisition of a majority stake in Hurray! will enable Shanda to significantly consolidate its position in this market ahead of other main competitors like Sina Corp. (SINA - Analyst Report), KongZhong Corp. (KONG - Snapshot Report) and Linktone (LTON - Analyst Report).

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