Hong Kong Media Firm Sells Stake in News Aggregator Particle for $448 Million

New York-listed Phoenix New Media Ltd. will sell a 32% stake in Particle Inc., the Chinese company behind news aggregator Yidian, for $448 million.

The deal values Particle at $1.4 billion.

Phoenix will retain a 5.63% stake, it said in a statement on Monday. The statement didn’t reveal the names of the proposed buyers.

“With the Letter of Intent now reached, we are proud to announce that an important milestone has been achieved,” said Shuang Liu, CEO of Phoenix.

“Yidian has attained tremendous user base … we are confident that Yidian will generate a handsome return on our investments. We also expect that our remaining interests in Particle will allow us to share in any further growth of Yidian," he added.

Shares in Phoenix surged 32% on Monday, closing at $4.75.

Founded in 1998, Hong Kong-based Phoenix was a major Chinese-language news portal during the PC era. Its peers included Sina.com, NetEase.com, and Sohu.com, which all listed in the U.S. in the year 2000.

Phoenix’s first tie-up with Particle took place in September 2014 when it invested $6 million in the company. After two more funding rounds, Phoenix had invested $44.5 million in Particle.

Backing Particle was seen as a response to challenges from a new cohort of news aggregation mobile apps — starting in 2012 with Beijing ByteDance Technology Co. Ltd.’s Toutiao, which uses smart algorithms to push personalized content to users.

Particle launched Yidian in 2013 with a business model similar to Toutiao. As of December, it had 70 million active daily users, according to QuestMobile, a data services provider.

Ren Xuyang, founder and CEO of Yidian, confirmed the deal in an email to staff on Monday. He said his company was preparing for a new round of fundraising and was revising Particle’s legal structure in order to list in Shenzhen or Shanghai in the near future.

Contact reporter Mo Yelin (yelinmo@caixin.com)