The buyout of Youku Tudou (NYSE:YOKU) by Alibaba (BABA -2.2%) is complete, the company says, following last month's shareholder approval.
The deal, about $4.2B, was completed through a merger with Alibaba merger subsdiary Ali YK Subsidiary Holding Limited. Barring excluded shares, shareholders received the equivalent of $27.60 per ADS in merger consideration.
The company has requested that trading ADS on the NYSE be suspended.
A company memo reportedly says "From the information we have now, we know that former employee Lu Fanxi is suspected of exploiting his position to undertake illegal, criminal activities." An audit has reportedly revealed "reasons for serious suspicion surrounding several production projects."
A source told the Financial Times that Lu, who was in charge of peer-generated content, is believed to have colluded with contractors for kickbacks.
Youku Tudou (NYSE:YOKU) is up 0.4% today after a mixed Q3 report where revenues beat expectations easily but net losses grew substantially.
Non-GAAP net loss of 316.5M yuan ($49.8M) was wider than a year-ago loss of 111.2M yuan ($17.5M). Non-GAAP net revenues rose 54%, however, and gross profit was up 36% to 311.5M yuan ($49M).
Advertising net revenues of 1.35B yuan ($212.2M) were up 37%, meeting guidance. Meanwhile, consumer revenues (from subscription service, interactive live entertainment and mobile games) jumped 514% to 256.2M yuan ($40.3M).
Shares are trading at $26.80; the firm's definitive merger agreement with Alibaba has that firm paying $27.60 per ADS.
Alibaba (NYSE:BABA) announces it will acquire Chinese online media provider Youku Tudou (NYSE:YOKU) for $27.60 per ADS. Shares of Youku Tuduo popped in October off of the original announcement of a go-private offer from Alibaba.
The transaction is expected to close in Q1 of 2016.
Key Youku shareholders -- including founder and CEO Victor Koo and Chengwei Capital -- have entered a support agreement to vote their shares in favor of the $3.6B cash offer, which values Youku at $4.2B.
The board is forming a committee of (a pair of) disinterested directors to consider the deal.
Alibaba (NYSE:BABA) has offered to acquire all the shares of Chinese video-streaming service Youku Tudou (NYSE:YOKU) it doesn’t already own, in a major bet on services outside its core e-commerce platforms.
Alibaba is offering $26.60 per Youku Tudou ADR - a 30% premium for the remaining 82% of the company - totaling a purchase price of $3.6B in cash. At that level, Youku Tudou would be valued at $4.2B.
Hammered over the last several months as macro concerns and plunging local markets took a toll, U.S.-traded Chinese tech stocks are up strongly (CQQQ +3.2%) today even as the Nasdaq and S&P post modest declines.
Web/mobile stocks posting big gains include giants Alibaba (BABA +5.3%) and Baidu (BIDU +4.5%), with the former naturally taking Yahoo (YHOO +4%) higher with it. Yahoo rose earlier this week after stating it's still pushing ahead with a spinoff of its 384M-share Alibaba stake.
Other gainers include Vipshop (VIPS +6.6%), SouFun (SFUN +6.2%), Qihoo (QIHU +6.7%), Youku (YOKU +5.8%), Jumei (JMEI +8%), Bitauto (BITA +5.3%), Weibo (WB +5.9%), Jumei (JMEI +8%), and Cheetah Mobile (CMCM +6.6%). Online travel leaders Ctrip and Qunar are also up big, possibly aided by new efforts from Beijing to boost Macau tourism.
Solar winners include Yingli (YGE +4.1%), ReneSola (SOL +5.6%), and Daqo (DQ +9.4%).