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Tencent offers to take Chinese search engine Sogou private as US-China relations worsen
- Tencent, Sogou’s biggest shareholder, offers to pay US$9 a share for US-listed search engine operator
- Offer marks latest take-private transaction for a US-listed Chinese company amid strained relations between Washington and Beijing
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Tencent Holdings made a preliminary, non-binding offer late Monday to take search engine Sogou private, the latest move to privatise a Chinese tech company as tensions worsen between Washington and Beijing.
Sogou said Tencent, its biggest shareholder, offered to pay US$9 a share for the shares of the search engine operator it does not already own, representing a 57 per cent premium to its closing price on Friday. The company’s American depositary shares closed up 48 per cent at US$8.51 on Monday, valuing it at US$3.3 billion.
The Beijing-headquartered company said a special committee of its independent directors would consider the proposal, but it had not “made any decisions” regarding the offer.
“There can be no assurance that Tencent will make any definitive offer to Sogou, that any definitive agreement relating to the proposal letter will be entered into between Sogou and Tencent, or that the proposed transaction or any other similar transaction will be approved or consummated,” Sogou said in a statement.
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Sogou, which has nearly 2,800 employees, was founded in 2005 and its controlling shareholder is Sohu, the Chinese video, internet search and online gaming group was founded by Charles Zhang.
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