Alibaba agrees Youku Tudou acquisition at $4.8b valuation
Alibaba Group has agreed to acquire US-listed Chinese online video platform Youku Tudou in an all-cash deal that values the company at approximately $4.8 billion.
According to a statement, Alibaba raised its offer to $27.60 per American Depositary Share (ADS) from an initial bid of $26.60 last month, which valued the target company at $4.2 billion. The new offer represents a 35.1% premium over the October 15 closing price, the day before the Youku Tudou announced it had received a take-private proposal from Alibaba, and a 13% premium to the November 5 close.
Alibaba and Yunfeng capital- a PE firm co-founded by Jack Ma, Alibaba's executive chairman - acquired a combined 18.5% stake in Youku Tudou for $1.22 billion in April 2014.
Youku Tudou's board of directors unanimously approved the transaction. Alibaba and the supporting parties, including Victor Koo, the founder, chairman and CEO of Youku Tudou, and Chengwei Capital, hold 60.6% of the voting power of the US-traded company.
The transaction, which is expected to close in the first quarter of 2016, is subject to shareholder approval. Koo will retain its position after the deal completes and Youku Tudou will subsequently no longer be listed on the New York Stock Exchange.
"We are eager to work with Alibaba to grow our multi-screen 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," Koo said in the statement.
Several Chinese strategic groups, including Alibaba, Tencent Holdings and property developer Wanda Group, are seeking to create media value chains that run the full gamut from content creation to distribution.
Morgan Stanley acted as financial advisor to Alibaba, while J.P. Morgan advised Youku Tudou's special committee. Simpson Thacher, Fangda Partners and Walkers served as legal advisor to Alibaba, while Skadden and TransAsia and Conyers advised Youku Tudou. Kirkland & Ellis advised J.P. Morgan.
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