Fri, Aug 21, 2015 - Page 14 News List

Le Holdings eyes US, Asian deals


The Chinese conglomerate behind LeTV (樂視) is considering at least 15 deals after hiring former Bank of America Corp dealmaker Winston Cheng (鄭孝明) to lead acquisitions and help expansion in the US and Southeast Asia.

Le Holdings (Beijing) Co (樂視控股), which controls LeTV businesses spanning smartphones and a sports Web site seeking a US$3 billion valuation, is in talks with some targets and considering fund-raising, said Cheng, head of corporate finance.

The company, founded by Chinese billionaire Jia Yueting (賈躍亭), is also considering incentives to retain staff.

Cheng’s arrival this month is part of efforts to adopt practices in line with global technology firms to help its expansion outside of China after parts of its business gained backing from outside investors, including billionaire Jack Ma (馬雲).

That is to partly come about through the recruitment of more Wall Street bankers, lawyers and auditors to help beef up its investment team of 28 people, Cheng said in an interview.

One of the former technology investment banker’s more pressing tasks is to come up with ways to bankroll the seven business units of the company that also includes electric cars.

“For my responsibilities, a lot of it will be how we most efficiently find the financing to fuel our growth,” he said on Tuesday.

“We need to expand and build our team, especially since we have international aspirations,” he said.

Less than a year ago, Beijing-based Le Holdings was under a spotlight when state-owned media said the subject of a corruption probe had indirectly invested in the company.

While that report raised a red flag for Cheng, he put aside his reservations and decided to take on the challenge of working on a broader range of projects.

“That part was definitely taken into consideration,” Cheng said.

“My assessment is that, did these guys create something out of their own ideas and hard work? The answer is yes,” he said.

The company and Cheng both declined to comment further on the media report.

LeTV is competing with other Chinese Internet companies not just in a race for talent, but also capital.

Its sports unit announced last month that it was trying to raise US$500 million in funds for acquisitions and expansion at a valuation of US$3 billion. That was after it had already attracted funding from Ma’s Yunfeng Capital (雲峰基金) and Prometheus Capital (普思投資), backed by the son of China’s richest man, Wang Jianlin (王健林).

Hiring employees is one thing; keeping them is another. The company envisions a share-based compensation structure that is to allocate stock options at both the group and unit level to ensure that employees are fully motivated.

Originally known for publicly traded online video business Leshi Internet Information & Technology Co, LeTV expanded into smartphone and TV manufacturing. Shares of Leshi have risen 211 percent in Shenzhen trading this year.

“They’ve reached a point where they are trying to get more help, particularly as they are trying to go international,” Cheng said.

“They’re trying to grow so many more businesses,” he said.

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