Tencent Could Buy Out Baidu’s Biggest Search Rival
Shares of Sogou (NYSE: SOGO), China's second-largest online search provider after Baidu (NASDAQ: BIDU), surged over 40% on July 27 after the company received a buyout offer from its top stakeholder, Tencent (OTC: TCEHY).
Tencent already owns 39.2% of Sogou's shares, which grants it a voting stake of 52.3%, and wants to buy all the remaining shares for $9 per ADS in a $2.1 billion all-cash deal. Tencent would buy most of those shares from Sohu (NASDAQ: SOHU), Sogou's former parent company and second-largest shareholder.
If the deal is approved, Sogou would be delisted and become a wholly owned subsidiary of Tencent. Sohu and Sogou haven't agreed to the deal yet, but the takeover could significantly strengthen Tencent's ecosystem and spell trouble for Baidu.
Source Fool.com
