Shares of Chinese media company Phoenix New Media (NYSE:FENG) jumped on Monday, rising as much as 41.7%. As of 12:10 p.m. EST, the stock was up 26%.
The stock's gain follows an announcement Monday morning that the company has entered into an agreement for the sale of a portion of its stake in Particle -- a company that owns Yidian, a fast-growing personalized news app in China.
Phoenix, also called iFeng, said it has entered into "a binding letter of intent" to sell its 32% of outstanding shares of Particle to an investor. After the transaction, Phoenix would own 5.6% of Particle's outstanding shares on "an as-if converted basis."
If the deal is completed, the shares would be sold for $448 million, valuing Particle at $1.4 billion.
"With the letter of intent now reached, we are proud to announce that an important milestone has been achieved," said Phoenix CEO Shuang Liu in a press release on Monday. "Yidian has attained tremendous user base and forged remarkably close relationships with leading Chinese handset manufacturers. We are confident that Yidian will generate a handsome return on our investments."
Phoenix believes its remaining stake in Particle will allow it to take part in further upside in the fast-growing Yidian app. But Phoenix is also optimistic about the cash it will receive from the transaction.
"The significant cash infusion from the proposed transaction will help fuel our own growth engine and expand both our product line and content through strategic investment opportunities," the CEO said.