Chinese Internet giant Baidu said Friday that it has received a non-binding takeover offer for its big stake in online video giant iQiyi, valuing iQiyi as a whole at $2.8 billion.
The offer came from Robin Yanhong Li, chairman and CEO of Baidu, and Gong Yu, CEO of iQiyi. They offered to acquire all of the outstanding shares of iQiyi owned by Baidu in a non-binding proposal, according to the firm. Baidu currently owns a 80.5 percent stake in iQiyi, meaning it would get $2.25 billion if the deal is finalized.
Chinese smartphone giant Xiaomi and Shunwei Capital are the other big shareholders of iQiyi.
"The buyers expect that iQiyi will remain a strategic partner of Baidu after the consummation of the transaction and enter into business cooperation agreements with Baidu," the company said.
The Baidu board has formed a special committee comprised of three independent directors to evaluate the offer. "There can be no assurance that any definitive offer will be made, that any legally binding agreement will be executed or that this or any other transaction will be approved or consummated," the company said.
Online video has been a key growth sector in China.
Source: China's Baidu Gets $2.25B Offer for Its 80.5 Percent Stake in Online Video Giant iQiyi
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