(Yicai Global) March 15 -- Shares of Century Huatong Group jumped after the Chinese gaming giant said that Tencent Holdings spent CNY2.8 billion (USD429.1 million) to become its second-largest shareholder.

Century Huatong's stock price [SHE: 002602] rose as much as 7.5 percent to CNY8.15 (USD1.30) this morning, after which it was 3.7 percent up in the afternoon. Its market cap was CNY56.5 billion (USD8.7 billion).

Tencent's unit has penned an agreement to increase its shareholding by 372 million shares or by a 5 percent stake to have 10 percent of its outstanding stock to strengthen cooperation, the Zhejiang province-based company said in a statement yesterday. The price is CNY7.5 (USD1.20) apiece. 

The company will also receive a new controlling shareholder. Chairman Wang Miaotong plans to sell 370 million units or a 5 percent stake to Chief Executive Wang Ji at the same price of CNY7.5 apiece. That results in a sum of CNY2.8 billion.

After that transaction, CEO Wang and parties acting in concert will have almost 15 percent of the online game developer's stock. Chairman Wang and his affiliates will hold 640 million shares or a nearly 9 percent stake as the third-largest stockholder. 

Wang Ji's increased control will help the company focus on its game development strategy, optimize its equity structure, and stabilize the management team to contribute to its sustainable development, according to the statement. But as each of the parties has a nearly similar amount of equity, no one can sway decision-making at meetings, the firm added.

Established in 2005, Century Huatong transformed into a gaming company in 2014 after specializing in car parts before. After that, the firm completed a merger of Diandian Interactive and Shengqu Games, becoming the largest mainland-listed company focusing solely on games.

Editor: Emmi Laine, Xiao Yi