Shanghai-based Shanda Interactive Entertainment, together with its controlling shareholder Skyline Media, has acquired around 19.5 percent of Sina Corp's shares through open market purchases, officials and the companies' Web sites said.

Sina shares were knocked lower last week when it warned new advertising restrictions would hit revenue.

The stake, worth about US$250 million (HK$1.95 billion), would make Shanda the largest shareholder in Sina, according to an analyst at a major brokerage.

Sina's shares fell sharply last week after it forecast a bleak first-quarter, blaming a new ban on broadcast advertisements for fortune-telling services.

Sina said first-quarter revenue would fall by as much as 24.4 percent from the fourth quarter, after the central government put a ban on TV and radio ads for horoscope-style messages, combined with changes that will reduce revenues from other messages.

The stake purchase is Shanda's second major buy in about three months. In November, Shanda said it would buy a controlling stake in South Korean rival Actoz Soft, a supplier of online games in China, for US$91.7 million.

Shares in New York-listed Sina have fallen 20 percent this year, compared with a 5 percent drop in the Nasdaq.

Shares in Shanda have fallen 29 percent this year.

Sina has a market value of US$1.3 billion, compared with Shanda's US$2.1 billion.

REUTERS, BLOOMBERG