Alibaba Eyes Youku Tudou's Outstanding Shares
Hangzhou, China – Alibaba Group (NYSE:BABA) today announced that it made a non-binding proposal to the board of directors of Youku Tudou Inc. (NYSE:YOKU) (“Youku”) to acquire all outstanding shares of Youku, including 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 strategic investment in Youku and owns 18.3% of the outstanding share capital of Youku based on Youku’s public filings.
Digital entertainment is core to Alibaba’s strategy of promoting consumption of virtual goods and services. The proposed transaction would expand the existing partnership between Alibaba and Youku, and would combine Alibaba’s unparalleled data-driven platforms in e-commerce, media and advertising with Youku’s market-leading digital video franchise to significantly accelerate Youku’s growth. Youku’s large user base, especially in mobile, and its popular platforms with high user engagement would form one of the key pillars of Alibaba’s digital entertainment strategy. Under Alibaba’s proposal, Youku’s founder, Victor Koo, would continue to lead the business as chairman and chief executive officer.
“We are pleased to submit the proposal to the Youku board of directors,” said Daniel Zhang, chief executive officer of Alibaba Group. “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.”
“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.”
Alibaba is making the proposal with the support of the founding shareholders of Youku, including Victor Koo, Chengwei Capital and their affiliates. 2
Webcast and Conference Call Information
Alibaba Group’s management will hold a conference call to discuss the announcement at 8:00 p.m. Hong Kong Time (8:00 a.m. U.S. Eastern Time) on October 16, 2015.
Details of the conference call are as follows:
International: +65 6713 5521
U.S.: +1 347 549 4095
U.K.: +44 203 713 5083
Hong Kong: +852 3018 6768
China: 400 624 0406 or 800 870 0531
Conference ID: 62411957
A webcast of this conference call will be available on Alibaba Group’s Investor Relations website located at http://alibabagroup.com/en/ir/home. A replay of the conference call will be available for one week (dial-in number: +61 2 9003 4211; conference ID: 62411957).