Internet portal Tom.com has acquired 49 per cent of Kunming Fench Star Information Industry and an exclusive right to purchase the remaining 51 per cent.
Tom.com, owned by Li Ka-shing, said in a statement that Hitech Profits, a wholly owned subsidiary of Tom.com, had entered into a deal with Dynamic, which owns the remaining 49 per cent of Fench Star.
The net effect of the deal will see Tom.com pay HK$262.84 million for the 49 per cent by issuing 47.70 million Tom.com shares. A further HK$31.97 million will be paid to Fench Star by the issuance of 5.8 million Tom.com shares. It said 7.5 per cent of the incentive shares will be released to the vendor if the net profit of Fench Star for the 2001 financial year is greater than 33 million yuan (about HK$30 million).
If the aggregate net profit of Fench Star for 2001 and 2002 is more than 66 million yuan, then 15 per cent of the incentive shares will be released. All of the incentive shares will be released if the aggregate net profit of Fench Star for 2001, 2002 and 2003 is greater than 100 million yuan.