TOM Group offers $201M for mobile unit buyout

Chinese media conglomerate the TOM Group has offered shareholders as much as $201 million to buy out its TOM Online unit, China's largest provider of mobile content services. Controlled by Hong Kong billionaire Li Ka-shing--the world's ninth richest individual according to Forbes, and the best billionaire name ever, according to FierceMobileContent--TOM Group is seeking to acquire TOM Online shares at HK$1.52 each, roughly a third more than the closing price on March 2; trading was suspended last week after rumors of the buyout first surfaced.

TOM Online was among the many Chinese mobile services companies negatively impacted in July 2006 when wireless operators China Mobile and China Unicom imposed new restrictions on mobile content marketing initiatives, targeting the number of unsolicited phone messages sent from providers to consumers. The proposed buyout would cut losses in shares of TOM Online to 23 percent since the restrictions were introduced. "Parent companies generally only consider buying out their units when they think they are undervalued," Credit Suisse Group analyst Wallace Cheung told Bloomberg.

TOM Group requires approval from its own shareholders before an offer can be presented to TOM Online shareholders. From there, TOM Group will also need the endorsement of minority stockholders representing more than 75 percent of the 1.033 billion TOM Online shares it is seeking to acquire. The offer will lapse if not completed by Dec. 31, TOM Group said in a statement.

For more on the TOM Group offer:
- read this Forbes article