Chinese MMO operator The9 has exchanged about half of its shares in Red 5 for nearly 153.9 million shares of L&A International Holding Limited. The9 previously owned a majority of the Firefall studio’s stock at 63.4%; the exchange represents a 30.6% equity interest in Red 5.
L&A International Holding Limited is a Cayman Islands holding company that… manufactures cashmere clothing. Each company will now hold an equity interest in the other as a hedge against market instabilities in their, ahem, rather different industries. It’s also possible that one or the other plans to liquidate its new shares to raise cash.
Of particular interest as a conversation piece is this quote from the statement: “The total consideration for the transaction for all the participating equity holders, including the company, is approximately US$76.5 million, implying Red 5’s valuation at US$170 million.”