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UPDATE 1-China's Shanda Games gets buyout offer from main shareholders

(Adds details, updates share movement)

Jan 27 (Reuters) - Chinese online game developer Shanda Games Ltd received a buyout offer from its controlling shareholders that values the company at $1.9 billion, highlighting the growing popularity of online gaming in China.

Shanda Interactive Entertainment Ltd and an affiliate of investment firm Primavera Capital, which together own 76.2 percent of Shanda, offered $6.90 per American depositary share, a premium of 22 percent to the stock's Friday close.

Shanda Games shares were up 12 percent at $6.34 in morning trading on Monday. The stock has risen 83 percent in the past year, hitting a 52-week high of $6.42 in July.

Online gaming revenue in China rose about 41 percent to 22.4 billion yuan ($3.70 billion) in the third quarter compared with a year earlier, according to research firm iResearch. (http://link.reuters.com/mef46v)

Shanda Games said its board was reviewing the offer.

The bidders said they expect to fund the deal with equity capital from consortium members and debt.

Rival Giant Interactive Group Inc received a go-private offer in November from Chairman Yuzhu Shi and an affiliate of Baring Private Equity Asia, valuing the company at about $2.8 billion.

The company said in December it was reviewing the offer.

Wilson Sonsini Goodrich & Rosati PC is the U.S. counsel to Shanda Interactive Entertainment and the consortium, while Latham & Watkins is U.S. counsel to Primavera Capital Ltd.

Davis Polk & Wardwell LLP is Shanda Games' U.S. counsel. ($1 = 6.0488 Chinese yuan)

(Reporting by Maria Ajit Thomas and Neha Alawadhi in Bangalore; Editing by Saumyadeb Chakrabarty and Savio D'Souza)

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