Alibaba Group Holding Ltd (BABA.N) offered to pay $3.5 billion to wind up the sole proprietor of Youku Tudou Inc (YOKU.N), known as China's YouTube, in a move that would give the e-trade titan access to more than a large portion of a billion online video clients.
The offer, a vote of trust in China's economy from Alibaba Chairman Jack Ma, makes Youku Tudou the most recent in a series of U.S.- recorded Chinese organizations being taken private by huge shareholders.
"Alibaba needs activity. Online or versatile video is the most obvious spot for that," said Tian Hou, an expert at TH Capital in New York.
Alibaba first got tied up with Youku Tudou in mid-2014, obtaining a stake of around 18 percent as a major aspect of a push into online video.
Alibaba's offer for Youku Tudou values the 82 percent of the organization it doesn't possess at $4.6 billion.
However, it will wind up paying $3.5 billion, considering the $1.1 billion of money on Youku Tudou's books, Alibaba's CFO, Maggie Wu, said on an approach Friday.
Youku Tudou said the all-money offer as of now had the backing of its director and CEO, Victor Koo.
Koo, a Bain and Co graduate who holds a MBA from Stanford University, possesses around 18 percent of Youku Tudou, as per a securities documenting.
Danger TO NETFLIX?
In spite of the fact that Youku has never turned a benefit, its more than 500 million month to month clients give a gigantic stage to Alibaba's aspirations to offer online film and TV and represents a potential danger to Netflix Inc's (NFLX.O) gets ready for China.
Alibaba's turn comes as Netflix is hoping to extend forcefully abroad as chances to develop get to be scarcer in its home market. Youku Tudou's membership benefit as of now offers Hollywood and Chinese-made motion pictures.
"For Netflix, I think individuals as of now felt that China would have been a test," Atlantic Equities examiner James Cordwell said. "This equitable serves as an accommodating update."
Alibaba's offer comes at a 30 percent premium to Youku Tudou's end cost on Thursday, esteeming the organization at about $5.2 billion, taking into account 194.47 million shares extraordinary as of June 30.
"Computerized items, particularly video, are pretty much as imperative as physical products in e-trade," Alibaba Chief Executive Daniel Zhang said. "Youku's top notch video substance will be a center part of Alibaba's computerized item offering later on."
Youku Tudou is one of around 30 U.S.- recorded Chinese organizations to have gotten an offer to go private this year, as indicated by Hong Kong research firm MCM Partners, numerous in the conviction that higher valuations are accessible back home.
In the greatest proposed bargain, a consortium offered to purchase security programming producer Qihoo 360 Technology Co Ltd (QIHU.N) for about $10 billion in June.
Youku Tudou's New York-recorded stock was up 22 percent at $24.95, beneath the offer cost of $26.60 per American Depositary Share.
Alibaba, shares of which were up 0.2 percent at $71.91, said it would finance the offer with money close by.
"Alibaba needs activity. Online or versatile video is the most obvious spot for that," said Tian Hou, an expert at TH Capital in New York.
Alibaba first got tied up with Youku Tudou in mid-2014, obtaining a stake of around 18 percent as a major aspect of a push into online video.
Alibaba's offer for Youku Tudou values the 82 percent of the organization it doesn't possess at $4.6 billion.
However, it will wind up paying $3.5 billion, considering the $1.1 billion of money on Youku Tudou's books, Alibaba's CFO, Maggie Wu, said on an approach Friday.
Youku Tudou said the all-money offer as of now had the backing of its director and CEO, Victor Koo.
Koo, a Bain and Co graduate who holds a MBA from Stanford University, possesses around 18 percent of Youku Tudou, as per a securities documenting.
Danger TO NETFLIX?
In spite of the fact that Youku has never turned a benefit, its more than 500 million month to month clients give a gigantic stage to Alibaba's aspirations to offer online film and TV and represents a potential danger to Netflix Inc's (NFLX.O) gets ready for China.
Alibaba's turn comes as Netflix is hoping to extend forcefully abroad as chances to develop get to be scarcer in its home market. Youku Tudou's membership benefit as of now offers Hollywood and Chinese-made motion pictures.
"For Netflix, I think individuals as of now felt that China would have been a test," Atlantic Equities examiner James Cordwell said. "This equitable serves as an accommodating update."
Alibaba's offer comes at a 30 percent premium to Youku Tudou's end cost on Thursday, esteeming the organization at about $5.2 billion, taking into account 194.47 million shares extraordinary as of June 30.
"Computerized items, particularly video, are pretty much as imperative as physical products in e-trade," Alibaba Chief Executive Daniel Zhang said. "Youku's top notch video substance will be a center part of Alibaba's computerized item offering later on."
Youku Tudou is one of around 30 U.S.- recorded Chinese organizations to have gotten an offer to go private this year, as indicated by Hong Kong research firm MCM Partners, numerous in the conviction that higher valuations are accessible back home.
In the greatest proposed bargain, a consortium offered to purchase security programming producer Qihoo 360 Technology Co Ltd (QIHU.N) for about $10 billion in June.
Youku Tudou's New York-recorded stock was up 22 percent at $24.95, beneath the offer cost of $26.60 per American Depositary Share.
Alibaba, shares of which were up 0.2 percent at $71.91, said it would finance the offer with money close by.
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