HONG KONG (04/14/2000) - Hongkong.com Corp. today announced it has stepped away from its bid to acquire a majority stake in fledgling e-commerce venture TheBigStore.com Asia Ltd. for approximately US$100 million after stock-market regulators effectively blocked the purchase.
Regulators of Hong Kong's Growth Enterprise Market (GEM) rejected the company's request for waiver of a rule against companies issuing new shares within six months after an initial offering, according to Susan Chan, a spokeswoman for China.com, parent of Hongkong.com.
Hongkong.com, which operates one of several regional portals under China.com, was first listed on March 9 and had planned to issue new shares to raise money to buy 51 percent of TheBigStore.com Asia, Chan said.
"While Hongkong.com can't proceed with the acquisition of TheBigStore.com Asia, their strategy in terms of e-commerce has not changed, and they're still actively exploring ways with other companies in order to strengthen their presence in e-commerce," Chan said.
China.com in January launched TheBigStore.com Asia in partnership with TheBigStore.com, a U.S.-based business-to-consumer (B2C) e-commerce company, and the mainland-based China Commerce Development Group. China.com holds a minority stake in the Asian venture, with plans to jointly develop consumer e-commerce sites throughout Asia. [See "China.com, TheBigStore.com Sign Retail Deal," Jan. 5.]Hong Kong's GEM was created as a market for young, technology-related companies, with stringent regulations to ensure listed companies' commitment in a high-flying technology stock market. However, waivers of some rules have been granted in several cases, including for Internet portal Tom.com Ltd., backed by powerful Hong Kong tycoon Li Ka-shing. [See "Hong Kong's Latest Internet IPO Draws a Crowd," February 23.]Hongkong.com, in Hong Kong, can be reached at +852-2571-9333 or online at http://www.hongkong.com. TheBigStore, in Newport Beach, California, can be reached online at http://www.thebigstore.com.