China's Shanda buys 19.5 pct stake in Sina Corp

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China's Shanda buys 19.5 pct stake in Sina Corp

HONG KONG, Feb 20 (Reuters) - China's top online game operator, Shanda , has acquired a 19.5 percent stake in Chinese Internet media firm Sina Corp. , the companies said on Sunday.

Shanghai-based Shanda Interactive Entertainment Ltd., together with its controlling shareholder Skyline Media Ltd., has acquired around 19.5 percent of Sina Corp.'s shares through open market purchases, officials and the companies' websites said.

The stake, worth about $250 million, according to Reuters data, would make Shanda the largest shareholder in Sina, said an analyst at a major brokerage.

Shanda, which has long been in talks with several players to expand its business, is trying to diversify its business in a bid to hedge against crackdowns by Beijing similar to the one that wreaked havoc last year on providers of mobile phone messaging services.

Sina's Internet services, which include mobile value-added services and online search, would complement Shanda's gaming business, analysts said.

Sina and Shanda officials declined to discuss details on Sunday.

The stake purchase is Shanda's second major buy in about three months. In November, Shanda said it would buy a controlling 29 percent stake in South Korean rival Actoz Soft Co. , a supplier of online games in China, for $91.7 million.

Shanda said it bought another 9 percent of Actoz's outstanding shares for about $14.4 million, boosting its total stake to about 38 percent.

Shanda, which made a $152 million initial public offering in May 2004, competes with NetEase.com Inc. and Tencent Holdings Ltd. in China. Shanda's share price has almost tripled from its IPO price of $11.

Sina's shares fell sharply last week after it said first-quarter revenue would fall by as much as 24.4 percent from the fourth quarter, after the government put a ban on TV and radio ads for horoscope-style messages, combined with changes that will reduce revenues from other messages.

The stock has fallen 20 percent over the year and closed at $25.60 on Friday.