Alibaba, which already owns 18.3 percent of the New York-listed target company, is offering $26.60 in cash per American depositary share (ADS), a Youku Tudou statement said, without giving a total value for the deal.
The company made an offer today (Oct. 16) for all of Youku’s remaining shares on now on the New York Stock Exchange at $26.50 per share, a markup of over 30% from its current price.
Alibaba’s deal-making has slowed in recent months, but it just made another big-ticket bet-a $3.6 billion offer to take over Youku Tudou, one of China’s largest Youtube-esque video streaming sites. The $5.2 billion valuation is based on Yukou Tudou’s 194.47 million shares outstanding as of June 30. Youku has $1.1 billion in net cash, resulting in a price of about $3.5 billion for Alibaba, she said.
Alibaba said in the press release that the proposed transaction would combine the company’s unparalleled data-driven platforms in e-commerce, media and advertising with Youku Tudou’s market-leading digital franchise.
Under the proposal, Youku founder, Victor Koo, would continue his role as chairman and CEO of the video service.
“We are happy to submit the proposal to the Youku board of directors”, said Daniel Zhang, chief executive officer of Alibaba Group.
The Alibaba-Youku deal comes amid a battle by China’s top video sites to lure in viewers and attempt to make them pay for premium streaming.
Taking after the obtaining, Alibaba expects to take Youku private, as per a recording. Retail markets and services run by the Firm include the China online shopping destination (NYSE:BABA); the China brands and retail platform (Tmall); the China group purchasing website that provides products by aggregating demand from consumers through small time discounted sales (Juhuasuan), along with the worldwide consumer market targeting consumers round the world (AliExpress).
The buyout of Youku Tudou’s stake is not necessarily ownership, but it would certainly help Alibaba attract predominantly younger generations who prefer to use smartphones and tablets versus PCs. Baidu’s iQiyi, Sohu and Tencent all contend in the video space, with Baidu and Tencent ready to incline toward their web crawler and portable informing realms, individually, to draw in viewers.
Citigroup Inc. (NYSE:C) traded 31.01 Million shares and its share price moved up 4.44% to close at $52.97.
