Updated April 15, 2008

   The largest transaction

at the Russian online gaming market can take place within its history. The owners of Buka Entertainment games developer hold talks about the company

sale to the strategic investors, which comprise such IT-companies as IBS, 1C and Astrum holding. Now it goes about the sale of the blocking stockholding,

which is estimated by experts at minimum $17,5 million. The owners are ready to sell the controlling interest of Buka in the long term prospect.

   The stockholders of the Russian Buka online games developer, which comprise Finam Investment Company, Norum Private Equity Advisors and three company managers, hold talks about the company stocks sale to the strategic investor, as said

the source aware of the transaction. According to him, it goes about the blocking stockholding sale now, but the transaction with the bigger than controlling interest is possible. "Talks have started at the previous year end.

Now the claimants for the purchase comprise the following companies: 1C software company, IBS Group of Companies over its own Oradell Capital fund and Astrum Online Entertainment holding (AOE) amalgamating such online games developers as Nival, IT Territor, TimeZero, and Nikita", the source said.

   In Finam and Norum confirmed the information about

the talks. Oradell Capital director general Mikhail Lukyanchuk refused to comment this information, but did not refute it.

Nevertheless, a source in IBS confirmed that talks were held and "there are already some agreements". AOE coowner Sergey Orlovsky did not refute the information about the negotiations, but refused to comment it.

1C press-service did not comment the information also.

   Buka Entertainment LLC was found in 1993 as the distributor of video and online games. Now the company is engaged in online games publishing and distribution of the foreign and own production, as well as in software development (for example, Panda Software antivirus). The company publishes in Russia and the CIS such games, as "Heroes of Might and Magic III-IV", "Far Cry", "Guild Wars" and "Lineage", "Pet'ka and Vasily Ivanovich", "Ekh Machina", "Steel Monsters", "Allods", "Vangers" etc. Buka LLC coowners comprise Finam-Information technologies fund (26,5%), Norum Private Equity Advisors company (26,5%) and three Buka managers (47%). In June, 2005 Finam and Norum have purchased together 52,9% of Buka Entertainment LLC, having paid around $6 million for the stockholding.

According to Norum data, in 2007 Buka earnings exceeded $35 million and EBITDA was around $10 million.

   Finam-Information technologies fund manager Alexey Basov said that Buka has got to that development stage where it is logic to consider the sale to a strategic investor. Mr. Basov did not name the companies with which talks were held, but marked they are "large market participants". Norum director for investments Alexander Vlasov marked that "nothing is signed yet". "The transaction can be notionally concluded at the year end, but there are no particular agreements yet", Mr. Vlasov marked.

   All Buka costs minimum $70-80 million, is sure Moorgate Capital managing partner Andrey Zubkov.

According to him, the minimum estimation of such companies is seven-eight EBITDA now.

" It is the lowest benchmark.

More than ten EBITDA can be paid for such company.

IT-business is very expensive now, as grows quicker than the other industries". Thus, if the blocking stockholding sold, the transaction sum would total minimum $17,5 million. If the company had been sold on the assumption of this estimation, the transaction with Buka would have become the largest purchase at the Russian online gaming market, as assumes the president of Verysell Group of Companies Mikhail Krasnov. We will remind that in April, 2005 the American holding Ener1 Group has purchased the controlling stock interest of Nival Interactive online games developer for the record then $10 million. But at the end of 2007 the company has been again controlled by its founder Sergey Orlovsky and has amalgam

ated with Astrum. In July, 2005 Finam has purchased 15% of Alavar online games developer for around $2 million.

   iKS-Consulting analyst Elena Krulova considers that it is rather favorable to sell Buka for Astrum company, which is actively engaged in development of online games segment.

"The market of CD games does not experience the better days, therefore it is logic to find a reliable partner that develops online direction and casual games". According to the estimations of J`Son & Partners company, by 2010 the stake of the digital content (including online games) that is sold on CDs in Russia edges down from 60% to 40%.