Chinese tech company Sogou announced today it has received a preliminary non-binding buyout proposal from Tencent, which already owns about 39.2 percent of the total issued and outstanding Sogou shares.
Chinese tech giant Tencent has proposed to acquire all of the Sogou’s outstanding ordinary shares for a cash price of US$9 per share. The offer includes the company’s American depositary shares (ADS are US dollar-denominated equity shares of a foreign-based company available for purchase on an American stock exchange). After news of the proposal broke this morning, Sogou shares climbed to US$8.47 on the New York Stock Exchange, an almost 50 percent increase.
If the proposed transaction goes through, it would result in Sogou becoming a privately-held, indirect wholly-owned subsidiary of Tencent. Sogou’s ADSs would be delisted from the NYSE.
Sogou was launched in 2005 by Beijing-based web product and services company Sohu.com and specializes mainly in web search. Sogou has grown to become the second-largest search engine by mobile queries and the fourth largest internet company by MAU (Monthly Active Users) in China.
Sogou CEO Wang Xiaochuan wrote on WeChat, “Sogou appreciates Tencent for its recognition of Sogou’s value, technical capabilities, and product innovation capabilities. Next, relevant matters will be carefully discussed and evaluated, so that Sogou can continue to create greater value for users.” A special Sogou Board committee will consider the Tencent offer.
Reporter: Fangyu Cai | Editor: Michael Sarazen
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