Alibaba offers $4.6 Billion for rest of Youku video site
19.10.2015 265 views
Alibaba Group Holding Ltd. offered about $4.6 billion to buy the rest of Youku Tudou Inc. as billionaire Jack Ma seeks to stream more video content to Chinese Internet users through control of the YouTube-like site.
Alibaba will pay the amount in cash for the 81.7% of the video website it doesn’t already own, Chief Financial Officer Maggie Wu said during a conference call on Friday. Youku has $1.1 billion in net cash, resulting in a price of about $3.5 billion for Alibaba, she said. Alibaba’s bid of $26.60 a share is 30% more than Thursday’s closing price. Youku rose 22%, the most since March 2012, to $24.91 at the close Friday in New York. Alibaba was little changed at $71.99.
Ownership of Youku Tudou would help Ma deliver U.S. films and drama series to more than a third of China’s population as Alibaba battles Baidu Inc. and Tencent Holdings Ltd. for the attentions of Internet users. The deal comes after he toured Hollywood to meet with studio executives, took control of a Chinese movie studio and invested in the latest “Mission: Impossible” film.
Youku and Tencent’s video sites both had about 286 million unique visitors in August, yet viewers spent more time watching content on Youku, according to data compiled by Bloomberg. Baidu’s IQiyi had 273 million visitors. Youku Tudou confirmed it received the non-binding proposal, with Chairman Victor Koo, Chengwei Capital and affiliated entities planning to support the bid. The Beijing-based company formed a committee to consider the deal. Koo will be chairman and chief executive officer under Alibaba’s proposal.
More than 461 million people in China consumed video online as of June, with 354 million users accessing from mobile phones, according to the China Internet Network Information Center. That’s larger than the entire population of the U.S.
Alibaba has averaged more than two purchases a month in 2015, announcing $13.4 billion of transactions, according to data compiled by Bloomberg. This is the 25th acquisition so far this year, the data show.
Youku, which has never posted a profit since its 2010 initial public offering, is zeroing in on U.S. studios for programming. The company, which mostly streams professionally produced content rather than amateur videos, plans to collaborate with U.S. entertainment producers to create content for its website, Koo said in an October 2014 interview.
Source: Internet Retailer
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