Goldman Sachs Group Inc. (GS:US) and Temasek Holdings Pte agreed to buy a minority stake in China’s Cloudary Corp. (READ:US) at a 25 percent lower valuation than in a previous funding round, said two people with knowledge of the matter.
The private placement values the operator of literary websites at about $600 million, less than an earlier valuation of $800 million, the people said, asking not to be identified because the information is private. Cloudary is controlled by Shanda Interactive Entertainment Ltd.
Cloudary, which filed for a U.S. initial public offering more than two years ago, has yet to start the share sale. A gauge of Chinese stocks listed in the U.S. last month traded at the widest discount since 2008 to the Nasdaq Composite Index as measured by price-to-earnings ratios, data compiled by Bloomberg show.
Equity funds managed by Orbis bought 1.875 percent of Cloudary in May 2012 for $15 million, according to a filing with the Securities and Exchange Commission last year. The deal valued the company at $800 million.
It wasn’t clear exactly how the investment in Cloudary will be carried out. Officials at Temasek, Goldman Sachs and Shanda declined to comment or weren’t immediately available. Sina.com reported on the investment by Goldman Sachs and Temasek earlier today, without saying where it got the information.
Cloudary, based in Shanghai, applied for a $200 million New York IPO in May 2011. Goldman Sachs had been named to help manage the listing in July 2011 though is no longer involved in the process. The company, led by former Bank of America (BAC:US) Corp. banker Robert Chiu, hired Bank of America, Citic Securities Co. and CICC HK Securities as underwriters, according to a filing last year.
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