Media mogul Li Ruigang leads $510M investment in Meike Sports

Chinese media mogul Li Ruigang, Tencent Holdings Limited, and TVB president Charles Chan Kwok Keung have agreed to inject HK$3.96 billion (US$510 million) in Hong Kong-listed sports shoe manufacturer Meike International Holdings Limited.

The deal, led by Li Ruigang, who is also the founder of China Media Capital, is believed to secure a shell company for the three parties to build a sports, entertainment and media empire.

The buyers are to subscribe 19.8 billion new shares issued by the Fujian province-based Meike at HK$0.2 per share, or a 77% discount to the company's last closing price before trading was suspended on July 7.

The new share issuance, which has a total value of HK$3.96 billion (US$510 million), compares with Meike's total share base of approximately 1.2 billion before the deal.

Li Ruigang is to subscribe 13.5 billion shares for an aggregate of HK$2.7 billion. Tencent is to purchase 5.3 billion shares for a total of HK$1.06 billion. Hong Kong businessman Charles Chan Kwok Keung is to buy one billion shares for HK$200 million in total.

The three parties will own around 94% of Meike on a diluted basis, with each owning 64.33%, 25.26%, and 4.77% respectively.