IDG-backed group submits revised bid for China's KongZhong

IDG-Accel China Growth Fund II and Leilei Wang are willing to pay $7.18 per share for all outstanding American Depository Shares (ADS) - a 12% premium to the August 24 closing price - according to a filing. The previous offer, submitted in June of last year, was for $8.56 per share. KongZhong's stock closed up 2.2% at $6.55 on August 25, although it is still down 6.2% on a one-year basis.

As of March 2016, Wang held a 19.4% stake in the business while IDG had 5.3%.

KongZhong was founded by Wang in 2002 as a wireless value-added services (WVAS) provider and listed on NASDAQ two years later, having received VC funding from Draper Fisher Jurvetson ePlanet. The company subsequently diversified into online and mobile gaming, and currently operates titles such as "World of Tanks," "World of Warplanes," "Auto Club Revolution" and "Blitzkrieg 3" in mainland China.

Internet games accounted for 58.6% of revenue in 2015, ahead of WVAS at 27.6% and mobile games at 13.8%. Overall revenue for the year came to $179.1 million, down from $227.6 million in 2014, while the company swung from a net profit of $22.6 million to a net loss of $16.2 million. This was blamed on "Guild Wars 2" failing to meet performance expectations.

The IDG-Accel China Growth Fund II, which is managed by IDG, closed at $750 million in 2007. The venture capital firm raised a third fund with Accel before going fully independent for Fund IV in 2014, which closed at $586 million. The most recent China vehicle, raised in partnership with Breyer Capital, closed at $1 billion in July.

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• Topics
• Greater China
• Buyouts
• Technology
• China
• TMT
• IDG Capital Partners