Morgan Stanley Awards Shanda Internet stock Rating

The Sina Science and technology news Beijing time October 17 evening information, Morgan Stanley announced today the investment Report, awarded the Grand Network (NASDAQ:SNDA) stock Overweight rating. The following is a summary of the report: Privatization proposal: Shanda CEO Chen has submitted a preliminary non-binding proposal to the board of directors, which plans to buy 31.6% of the remaining shares of the Shanda network from shareholders.　　Chen Tianqiao's offer was $41.35 per share, compared with a premium of 24% for the Friday closing of the Grand network, but 24% lower than the 52-week peak. Cash Adequacy: We believe that most of the capital needed to acquire shares will come from the company's cash holdings. By the end of the second quarter of 2011, the Grand Network had a net cash of about 1.2 billion dollars. We expect this privatization will require about 740 million dollars in cash.　　In addition, the use of Third-party funds may also be considered. Chen Tianqiao has no intention of throwing shares: Chen has said that it is no doubt selling the grand network stake. The Grand Web board has set up a special committee of independent directors to consider the proposal.　　Some media reports said that Shanda network may consider in the domestic a-share listing. The new business is still incubating: in the first half of this year, Shanda gaming revenues accounted for about 77% of the company's total revenue. We think: 1 Shanda Network's non-gaming business revenue outlook is not yet clear, may continue to lose money in the short term; 2 based on historical records, Shanda Network is very positive for mergers and acquisitions, which will bring integration risk; 3 in the first half of this year, Shanda game revenue grew only 14% Year-on-year, the increase was lower than Tencent and NetEase and other competitors; 4　　Shanda's business diversification may be stressful for the company's resource allocation and management efforts. Stock Rating: We awarded the Grand Network stock "overweight" rating. (Li Ming) share: