Shareholder Tencent offers to take Sogou private (updated)
27/07/2020 15:46
(Adds company's valuation, background, details from release)
July 27 (Reuters) - China's Sogou Inc SOGO.N said on
Monday shareholder Tencent Holdings 0700.HK has made a
preliminary offer to buy the rest of the web search firm it did
not already control, in a deal that valued the company at about
$3.5 billion.
Tencent, which beneficially owns about 39.2% of the total
issued and outstanding shares of Sogou, has offered $9 per share
in cash, a premium of 56.5% to the last close of Sogou's
U.S.-listed stock.
Sogou's shares climbed to $8.39 in early morning trade.
The company was founded in 2005 by Sohu.com Inc SOHU.O and
generates revenue mainly through search advertising services.
Its Chinese rivals include Baidu Inc BIDU.O and Alibaba's
BABA.N UCWeb.
Sogou made its debut on the U.S. market in November 2017 and
raised $585 million at $13 per share.(https://reut.rs/3f5J1GW)
Tencent intends to finance the transaction with cash on hand
and has won the backing of Sohu CEO Charles Zhang, who owns
about 6.4% of Sogou, the Chinese tech giant said in a letter
addressed to the target's board.
A special committee of the board, composed solely of
independent directors, will consider the proposal, Sogou said.
(Reporting by Ayanti Bera in Bengaluru; Editing by Shinjini
Ganguli and Sriraj Kalluvila)
((Ayanti.Bera@thomsonreuters.com; 646 223 8780 - 3401;))