Alibaba Cash’s in A $1.22B Investment in Chinese Video Site Youku Tudou.
China’s massive home shopping group, Alibaba, is further ramping it up with its interest in media with the recent purchase of a $1.22 billion stake in China’s online video leader Youko Tudou.
The two companies have announced that Alibaba and its associate Yunfeng Capital will acquire a combination of existing shares and tranche of newly issued equity from the New York Stock Exchange listed Youku Tudou. They are cashing in a total of $1.6944 per share, corresponding to $30.50 per American Depository share.
That’s a premium of 26% to the $24.14 price at which ADS had finished trading in on Friday.
Following this deal, Alibaba shall hold on to 16.5% of Youku Tudou and Yunfeng 2%. Jonathan Lu, Alibaba’s CEO will join Youku Tudou’s boards of directors when the transactions completes.
“Alibaba’s investment will strengthen Youku Tudou as China’s largest online video platform and further differentiate our services and user experience. It will help us continue to build an immersive cultural entertainment platform that integrates online and offline entertainment,” said Victor Koo, chairman and CEO of Youku Tudou, in a prepared statement.
“This is an important strategic initiative that will further extend the Alibaba ecosystem and bring new products and services to Alibaba’s customers,” said Jack Ma, Alibaba’s executive chairman.
Alibaba, which is expecting to launch their IPO sometime soon, with a worth that totals up to $150 billion in New York, has recently one on a purchasing spree that pushes the auctions and giant e-commerce further into media and entertainment.
It has also announced plans to purchase a Hong Kong-listed film producer Chinavison, a stake in Chinese Internet TV group Wasu Media and launched a crowd-funding site. Ma, Yunfeng and Alibaba already claimed some stakes in Huayi Brothers, China’s largest private sector film group, and Media Asia, a Hong Kong film company.