In an all-stock deal, China’s leading online video provider, Youku Inc. (NYSE: YOKU), is merging with Tudou Holdings Ltd. (NASDAQ: TUDO). Tudou shareholders will receive 7.177 shares of Yoku stock for each share of Tudou they hold. Holders of Tudou’s US ADSs — worth 4 shares of class A common stock — will receive 1.595 Youku ADSs in the exchange. One Youku ADS is equal to 18 shares of Youku class A common stock.
Youku’s market cap is about $1.93 billion, while Tudou’s is about $402 million. Youku shareholders will own approximately 71.5% of the combined entity, while Tudou’s owners will hold 28.5%.
Tudou had a miserable fourth quarter and the company’s shares fell sharply last week. Exploding costs more than cancelled out the effect of higher revenues for the company. Youku reported a net loss for 2011 this morning of $23 million, while Tudou’s loss for last year came in at $81.2 million.
The combined company will be called Youku Tudou Inc. and will continue to trade on the NYSE under the ‘YOKU’ symbol.
Youku ADSs are up about 13% in the pre-market this morning, at $28.30 in a 52-week range of $13.76-$69.95. Tudou’s ADSs have skyrocketed, up more than 190% to $29.61, a new 52-week high. The previous range is $9.50-27.91.
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
