Baidu Inc (ADR) (NASDAQ:BIDU), the leading Chinese language Internet search provider, today announced that its board of directors (the “Board”) has recently received a non-binding proposal from Mr. Robin Yanhong Li (“Mr. Li”), chairman and chief executive officer of Baidu, and Mr. Yu Gong, chief executive officer of Qiyi.com, Inc. (“Qiyi”), proposing to acquire all of the outstanding shares of Qiyi beneficially owned by Baidu based on an enterprise valuation of US$2.8 billion for 100% of Qiyi on a cash-free and debt-free basis (the “Transaction”). Pursuant to the non-binding proposal, the buyers expect that Qiyi will remain a strategic partner of Baidu after the consummation of the Transaction and enter into business cooperation agreements with Baidu. Baidu currently owns 80.5% of Qiyi’s total outstanding shares on an as-converted and fully-diluted basis.
The Board has formed a special committee comprised of three independent directors, Messrs. Greg Penner, Brent Callinicos and James Ding, to evaluate the Transaction. Mr. Greg Penner will chair the special committee. The special committee has retained Skadden, Arps, Slate, Meagher & Flom LLP as its U.S. legal counsel, and intends to retain an independent financial advisor as well as Cayman and PRC legal counsels in due course, to assist the special committee in its work.
The Board cautions Baidu’s shareholders and others considering trading in its securities that the Board recently received the non-binding proposal and no decisions have been made with respect to Baidu’sresponse to the proposal. There can be no assurance that any definitive offer will be made, that any legally binding agreement will be executed or that this or any other transaction will be approved or consummated. Baidu does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law. (Original Source)
Shares of Baidu are up nearly 5% in pre-market trading. BIDU has a 1-year high of $223.95 and a 1-year low of $100. The stock’s 50-day moving average is $167.67 and its 200-day moving average is $169.80.
On the ratings front, Baidu has been the subject of a number of recent research reports. In a report issued on February 3, Jefferies Co. analyst Cynthia Meng maintained a Buy rating on BIDU, with a price target of $203, which represents a potential upside of 43.8% from where the stock is currently trading. Separately, on January 22, Nomura’s Andrew Orchard downgraded the stock to Hold and has a price target of $180.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Cynthia Meng and Andrew Orchard have a total average return of -8.8% and -14.7% respectively. Meng has a success rate of 32.4% and is ranked #3049 out of 3564 analysts, while Orchard has a success rate of 11.1% and is ranked #2926.
The street is mostly Bullish on BIDU stock. Out of 7 analysts who cover the stock, 4 suggest a Buy rating and 3 recommend to Hold the stock. The 12-month average price target assigned to the stock is $220.00, which implies an upside of 55.8% from current levels.
Baidu Inc is a Chinese language Internet search provider. The Company offers a Chinese-language search platform on its website Baidu.com.