Alibaba Reaches Deal to Buy Youku Tudou
Following an earlier approach, a raised bid secures a deal for the Chinese online video provider
An program plays on the Youku Tudou Inc. website in Hong Kong. PHOTO: ASSOCIATED PRESS
Alibaba Group Holding Ltd. said Friday it would buy U.S.-traded Chinese online video provider Youku Tudou Inc. in an all-cash deal, giving it a means to secure a share of China’s fast-growing online video market.
The deal values Youku Tudou, in which Alibaba already owns about a one-fifth stake, at about $4.4 billion.
Alibaba’s rivals have ramped up spending on new movies, TV shows and original programming to win over a massive new audience. Alibaba had approached the company with a buyout offer in October.
Alibaba will pay $27.60 an American depositary share, a 35.1% premium over the closing price of Youku Tudou’s stock on Oct. 15, the day before Youku Tudou announced it had received the buyout proposal from Alibaba, and a 13% premium to Youku Todou’s trading price on Thursday. The company in October had offered $26.60 per share.
Youku Tudou’s board of directors unanimously approved the agreement.
Youku Tudou’s chairman and chief executive, Victor Koo, had pledged his shares in support of the deal and said he would continue to lead the operations if the deal closed. He will lead the company after the deal closes.
Alibaba and parties who have agreed to support the deal hold about 60.6% of the voting power of Youku Tudou shares.
Koo said in Friday the company is eager to work with Alibaba to boost its multiscreen entertainment and media ecosystem.
“We are confident that we will strengthen our market position and further accelerate our growth through the integration of our advertising and consumer businesses with Alibaba’s platform and Alipay services,” he said.
ADS of Youku Tudou jumped 8.9% to $26.54 in recent trading.
