China Strategic expands with 30pc stake in PacificNet.com
Diversified China Strategic Holdings is to acquire a 30 per cent stake in United States-based e-commerce solutions provider start-up PacificNet.com, in its first foray into the business-to-business Internet market.
China Strategic chairman Oei Hung Leong is also to buy 10 per cent of PacificNet.com.
The total acquisition cost of US$4 million for the 40 per cent stake values PacificNet.com at $10 million. This compares with its valuation of $2 million two weeks earlier, based on the $400,000 acquisition cost for a 20 per cent stake by locally-based mobile-phone distributor Fortune Tele.com.
Mr Oei, who is to become PacificNet.com's chairman, said the investment would not be used as a speculative vehicle for short-term profits, and China Strategic intended to hold it as a long-term investment.
'This is not shares speculation,' he said, adding the close to 200 former state-owned factories in which China Strategic had acquired control, could make use of PacificNet.com's e-commerce solutions to expand sales channels.
He denied rumours China Strategic's subsidiary China Online had disposed of its 200 million Pacific Century CyberWorks shares.
He said such a disposal was not possible, as China Strategic's agreement to sell a 32.8 per cent China Online stake to China Sci-Tech Holdings had not been completed.
PacificNet.com aims to provide Web-site design and customer support services to small and medium-sized US importers.