BEIJING -- Shares in leading Chinese Internet portal
(SINA - Get Report)
are seeing a pop on takeover rumors. The stock has jumped 16% since mid-August amid speculation that
, a major shareholder, soon may be forced to offload its stake in the company.
is most often cited as a potential suitor, but it has internal problems and may not be the only party interested in a stake in Sina, whose shares rose 99 cents, or 3.9%, to $26.17 in New York on Wednesday.
Nearly 20% of Sina is in the hands of gaming concern Shanda, which reportedly spent about $200 million buying up shares in the open market in February 2005. But Shanda has since fallen on hard times: Its shares have lost roughly half their value, and many analysts believe the company will need to sell the Sina holding for cash to pay off a convertible bond in 2007.
A Shanda representative could not be reached for comment.
The buzz over a possible new Sina deal has attracted extra interest because of Sina's standout position in China's Internet market. It has one of the best-known brands, a big following among white-collar professionals and university students, and a fast-growing blog service.
As the No. 1 news portal in China, Sina is a "very valuable Internet property" with "tremendous traffic," says Steven Xi, a Beijing-based managing director at The Hina Group, an investment banking and private equity firm.