Recruiting in China

Shares of Shanghai-based BesTV New Media Co and Shanghai Oriental Pearl Group surged on news that the two companies would merge as part of the city's push to reform state-owned media companies.

BesTV is merging with Oriental Pearl through a share swap with one share for every 3.04 shares of the target company, valuing the latter at 10.69 yuan (US$1.74) per share, according to a stock exchange filing yesterday. BesTV surged by the daily limit of 10 percent to 35.19 yuan.

Oriental Pearl would be delisted on completion of the deal. The company's shares also jumped 10 percent to 12.01 yuan yesterday.

BesTV will also acquire companies such as SMG Pictures, Wings Media, Shanghai Interactive TV, and TV shopping company Oriental CJ through a private placement at 32.54 yuan per share to cement its market position and diversify revenue streams.

"Through the acquisition, BesTV now covers the whole industry including content production and Internet distribution channels, and it fits with China's reform and consolidation in the media sector," China International Capital Co said in a research note yesterday.

BesTV will also issue new shares to raise up to 10 billion yuan through a private placement with 10 institutional investors, including Shanghai Media Group Investment Center, the Bank of Communications Culture Investment Fund and China Merchants Fund.

Part of the capital will be used to fund Internet TV projects at the new entity after the completion of the merger.

Parent Shanghai Media Group will remain the controlling shareholder of BesTV with 45.07 percent after the merger.