Alibaba Offers To Buy Chinese Video Streaming Service Youku Tudou

(RTTNews) - In a move to boost its e-commerce activities through digital entertainment, Chinese online retailer Alibaba Group Holding Ltd. (BABA) offered to acquire Chinese video streaming service provider Youku Tudou Inc. (YOKU) with a market capital of $3.99 billion.

The unsolicited offer of $26.60 per ADS in cash includes all outstanding shares of Youku, dubbed Chinese You Tube, and its American Depository Shares. The offer represents a premium of 30.2 percent over the closing price of its ADS on NYSE on October 15. Alibaba already owns 18.3 percent of Youku.

Daniel Zhang, chief executive officer of Alibaba Group said, "We believe that the proposed transaction, with tighter integration of our resources, will help Youku achieve exciting growth in the years ahead by leveraging Alibaba's assets in living-room entertainment, e-commerce, advertising and data analytics. Digital products, especially video, are just as important as physical goods in e-commerce, and Youku's high-quality video content will be a core component of Alibaba's digital product offering in the future. I look forward to working with Victor and his leadership team to grow our combined digital entertainment business."

Alibaba said they have sought the support of the founding shareholders of Youku, including Victor Koo, Chegwei Capital and their affiliates.

Separately, Youku said it received the 'going private' offer from Alibaba, and that its Board has formed a special committee of two independent directors, Jonathan Jia Zhu and Jixun Foo, to consider the nonbinding offer. Youku also revealed that Alibaba has entered into a support agreement with its Chairman and CEO Victor Koo, Chengwei Capital and various entities, to vote in favor of the transaction.

YOKU is currently trading at $25.10, up $4.67 or 22.85 percent on NYSE