China Mobile Games and Entertainment is a subsidiary cooperation of VODone. It is a fusion enterprise of Dragon Joyce, 3GUU (our previous portfolio which we exit in 2010), and Yi Gao, which forms the three principle business of CMGE; Featured phone games, smart phone games, and mobile design. VODone acquired the 3 main businesses in 2009-2010, forming the CMGE group, controlling 62.9%.
In 2012, VODone board of directors proposed spin-off listing of CMGE business through way of introduction, of which no fund will be raised in the offering. Each American Depository Share can be converted into 2000 VODone ordinary shares. CMGE American Depository Shares will begin trading on September 25th.
VODone use way of introduction to list CMGE for the following 2 reasons:
1. VODone and CMGE has different growth path and business strategies, the spin-off will provide separate platforms for fundraising, increased financial transparency, liquidity for employee stock options.
2. The separate listing of CMGE will realize its full valuation potential thus, better valuation for VODone.