Baidu receives $2BN+ offer for stake in Qiyi streaming service


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Editor

| 13 February 2016




In a move that could shake up the Chinese online video market, the country’s web services giant Baidu has received an offer by senior management for its controlling stake in the iQiyi streaming service.



Baidu chairman and chief executive Robin Yanhong Li and iQiyi chief executive Yu Gong are proposing to acquire Baidu’s 80.5% stake in the business based on an enterprise valuation of US$2.8 billion for all of the company.

The independently-operated Baidu subsidiary has spent the last few months boosting considerably its online video slate in China. In January 2016 it signed a multi-year film output agreement with 20th Century Fox, giving it new release digital transactional video-on-demand (TVOD) and exclusive first-run subscription video-on-demand (SVOD) rights to 20th Century Fox’s films in China. This made it the first online platform in the country to offer TVOD and SVOD access to films such as The Martian and The Revenant.

Following the offer, the Baidu board has formed a special committee to evaluate any transaction. However, the company cautioned shareholders and others considering trading in its securities that the board recently received the non-binding proposal and no decisions have been made with respect to its response to the proposal.