Alibaba offers to buy all of 'China's YouTube', Alibaba Group Holding Ltd (BABA.N) offered to pay $3.5 billion to become the sole buyer of Youku Tudou Inc (YOKU.N), accepted as China's YouTube, in a move that would accord the e-commerce behemothic admission to added than bisected a billion online video users.
The offer, a vote of aplomb in China's abridgement from Alibaba Administrator Jack Ma, makes Youku Tudou the latest in a cord of U.S.-listed Chinese companies getting taken clandestine by big shareholders.
"Alibaba needs traffic. Online or adaptable video is the amount one abode for that," said Tian Hou, an analyst at TH Capital in New York.
Alibaba aboriginal bought into Youku Tudou in mid-2014, accepting a pale of about 18 percent as allotment of a advance into online video.
Alibaba's action for Youku Tudou ethics the 82 percent of the aggregation it does not own at $4.6 billion.
But it will end up paying $3.5 billion, demography into annual the $1.1 billion of banknote on Youku Tudou's books, Alibaba's arch banking officer, Maggie Wu, said on a alarm on Friday.
Youku Tudou said the all-cash action already had the abutment of its administrator and arch executive, Victor Koo.
Koo, a Bain & Co alum who holds an MBA from Stanford University, owns about 18 percent of Youku Tudou, according to a balance filing.
THREAT TO NETFLIX?
Though Youku has never angry a profit, its added than 500 actor account users accommodate an astronomic belvedere for Alibaba's ambitions to advertise online blur and television and poses a abeyant blackmail to Netflix Inc's (NFLX.O) affairs for China.
Alibaba's move comes as Netflix is searching to aggrandize aggressively across as opportunities to abound become scarcer in its home market. Youku Tudou's cable account already offers Hollywood and Chinese-made movies.
"For Netflix, I anticipate humans already anticipation that China was traveling to be a challenge," Atlantic Equities analyst James Cordwell said. "This just serves as a accessible reminder."
Alibaba's action comes at a 30 percent exceptional to Youku Tudou's closing amount on Thursday, account the aggregation at about $5.2 billion, based on 194.47 actor shares outstanding as of June 30.
"Digital products, abnormally video, are just as important as concrete appurtenances in e-commerce," Alibaba Arch Controlling Daniel Zhang said. "Youku's high-quality video agreeable will be a amount basic of Alibaba's agenda artefact alms in the future."
Youku Tudou is one of about 30 U.S.-listed Chinese companies to accept accustomed an action to go clandestine this year, according to Hong Kong analysis close MCM Partners, abounding in the acceptance that college valuations are accessible aback home.
In the better proposed deal, a bunch offered to buy aegis software maker Qihoo 360 Technology Co Ltd (QIHU.N) for about $10 billion in June.
Youku Tudou's New York-listed banal was up 22 percent at $24.95, beneath the action amount of $26.60 per American Depositary Share.
The offer, a vote of aplomb in China's abridgement from Alibaba Administrator Jack Ma, makes Youku Tudou the latest in a cord of U.S.-listed Chinese companies getting taken clandestine by big shareholders."Alibaba needs traffic. Online or adaptable video is the amount one abode for that," said Tian Hou, an analyst at TH Capital in New York.
Alibaba aboriginal bought into Youku Tudou in mid-2014, accepting a pale of about 18 percent as allotment of a advance into online video.
Alibaba's action for Youku Tudou ethics the 82 percent of the aggregation it does not own at $4.6 billion.
But it will end up paying $3.5 billion, demography into annual the $1.1 billion of banknote on Youku Tudou's books, Alibaba's arch banking officer, Maggie Wu, said on a alarm on Friday.
Youku Tudou said the all-cash action already had the abutment of its administrator and arch executive, Victor Koo.
Koo, a Bain & Co alum who holds an MBA from Stanford University, owns about 18 percent of Youku Tudou, according to a balance filing.
THREAT TO NETFLIX?
Though Youku has never angry a profit, its added than 500 actor account users accommodate an astronomic belvedere for Alibaba's ambitions to advertise online blur and television and poses a abeyant blackmail to Netflix Inc's (NFLX.O) affairs for China.
Alibaba's move comes as Netflix is searching to aggrandize aggressively across as opportunities to abound become scarcer in its home market. Youku Tudou's cable account already offers Hollywood and Chinese-made movies.
"For Netflix, I anticipate humans already anticipation that China was traveling to be a challenge," Atlantic Equities analyst James Cordwell said. "This just serves as a accessible reminder."
Alibaba's action comes at a 30 percent exceptional to Youku Tudou's closing amount on Thursday, account the aggregation at about $5.2 billion, based on 194.47 actor shares outstanding as of June 30.
"Digital products, abnormally video, are just as important as concrete appurtenances in e-commerce," Alibaba Arch Controlling Daniel Zhang said. "Youku's high-quality video agreeable will be a amount basic of Alibaba's agenda artefact alms in the future."
Youku Tudou is one of about 30 U.S.-listed Chinese companies to accept accustomed an action to go clandestine this year, according to Hong Kong analysis close MCM Partners, abounding in the acceptance that college valuations are accessible aback home.
In the better proposed deal, a bunch offered to buy aegis software maker Qihoo 360 Technology Co Ltd (QIHU.N) for about $10 billion in June.
Youku Tudou's New York-listed banal was up 22 percent at $24.95, beneath the action amount of $26.60 per American Depositary Share.
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