During Friday’s Morning trade, Shares of Alibaba Group Holding Ltd (NYSE:BABA), gained 0.71% to $72.27. The firm opened its current trade at $72.50, and as of now, it is trading at $72.27. The total volume traded for the day is 7.28M shares, as compared to its average daily volume of 19.35M shares. The stock is floating in a range of $72.15 - $73.64. The stocks hold the market capitalization of $181.37B, after the company declared that it put forth an offer buy all of the shares of Youku Tudou (YOKU), the Chinese YouTube-like video streaming service, for about $3.6 billion.
Alibaba already owns an 18.3% stake in the company after investing in Youku last year.
Alibaba offered to pay $26.60 per share in cash for the company, a premium of about 30% over Youku’s closing price on Thursday, valuing Youku at about $5.2 billion based on the company’s outstanding 194.47 million shares.
According to detailed report, Alibaba Group (BABA) declared that it made a non-binding proposal to the board of directors of Youku Tudou Inc. (YOKU) to acquire all outstanding shares of Youku, counting shares represented by American depositary shares (“ADSs,” each representing 18 ordinary shares of Youku), that it does not already own for US$26.60 per ADS in an all-cash transaction. The proposal is subject to satisfactory completion of due diligence by Alibaba and the negotiation of a mutually acceptable definitive merger agreement. In May 2014, Alibaba made an initial planned investment in Youku and owns 18.3% of the outstanding share capital of Youku based on Youku’s public filings.
“We are happy to submit the proposal to the Youku board of directors,” said Daniel Zhang, chief executive officer of Alibaba Group. “We believe that the projected transaction, with tighter integration of our resources, will assist 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.”
“I’ve always admired what Victor has built,” said Alibaba Group executive chairman Jack Ma. “A closer partnership with Youku will give us the opportunity to support Victor and his leadership team to fulfill the dream of building the leading digital entertainment platform in China.”
