- Baidu, Inc BIDU is exploring selling its controlling stake in iQIYI, Inc IQ at a potential valuation of ~$7 billion, Reuters reports.
- Baidu, which owns 53% of iQIYI and holds over 90% of its shareholder voting rights, looks to sell all its holdings in China's Netflix, Inc NFLX counterpart.
- Baidu's targeted valuation of $7 billion represents a price of ~$8.13 per share, implying a 74% premium on its June 14 close of $4.67.
- The sudden divestment plan comes after Baidu deemed iQIYI a non-core asset.
- Baidu seeks to sharpen its focus on developing its capital-intensive artificial intelligence and autonomous driving units.
- The stake sale plan worth ~$50 billion by market value comes amid a domestic regulatory crackdown since late 2020 on firms from technology, private education, and other sectors, which battered their shares and forced some to scale back expansion in non-core areas. Baidu and iQIYI reported lackluster results in Q1.
- The iQIYI stake attracted interest from multiple financial sponsors and state-owned companies, including PAG and China Mobile.
- Baidu has reportedly engaged Bank of America to work on the potential sale.
- iQIYI called this report "pure market rumor" in an emailed statement to Reuters.
- Price Action: IQ shares traded lower by 4.28% at $4.47 in the premarket on the last check Wednesday.
- Photo via Wikimedia Commons
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.