Listed Sydney internet player BMCMedia has announced the sale of a minority stake in the company to trans-Asian internet giant Chinadotcom.
The sale comes just one day after the company explained away queries from the Australian Stock Exchange -- regarding an unexplained surge in the company's share price -- as due to positive media coverage.
The ASX's query stemmed from an unexplained 60 per cent skyrocketing in BMC's share price in the last week.
Chinadotcom paid around $A8.5 million for a 5.9 per cent stake in BMC, with options to double that holding at a discounted price, the company said.
BMC managing director Murray Hamilton maintained that it was unlikely the market success of the company over the past week was related to leaked rumours surrounding the Chinadotcom deal. He said BMC had been talking to several potential funding partners and that the Chinadotcom sale had only been finalised at ten o'clock last night.
BMC attributed most of its market movement over the last week to small-scale "retail" investors, who were more likely to respond to media representation of the company and less likely to have knowledge of its inside dealings, he said.
Accordingly, an ASX spokersperson said it was unlikely rumours of the Chinadotcom deal leaked, causing BMC share prices to rise. Although BMC made no mention of the impending deal in its response to the ASX yesterday, this did not breach the exchange's listing disclosure ruling 3.1 because the deal was not yet finalised, the spokesperson said.
"In this case, it's confidential," they said. "They were in a difficult position."
With lows earlier this year of under 60 cents a share, yesterday's share price of over $1.80 represents a growth in market value for the company of some 300 per cent in three months.
BMC shares held steady following the Chinadotcom announcement this morning, staying above $1.80.