Tudou, a Nasdaq-listed China-based video sharing website backed by a corporate venturing unit of International Data Group, has agreed to merge with China-based internet television company Youku.
Tudou shareholders will swap their shares for a 28.5% stake in Youku, according to a statement. The company will be renamed Youku Tudou.
When Tudou went to initial public offering its main institutional shareholders were IDG Technology Venture Investment, a China unit of International Data Group, Singapore’s sovereign wealth fund Temasek, First Easy Group, as well as venture firms GGV Capital, General Catalyst Group, Jafco, Capital Today, Venrock Associates, and Crescent Point Management.
The merger has provided a fillip for shareholders in Tudou. Its stock price closed yesterday at $42.50 per share, valuing the company at $1.1bn, while at the end of last Friday the stock closed at $15.42 per share. The first time Tudou has traded above its initial public offering price of $29 per share at the close of trading was Monday this week, after the company’s shares fell 12% in their first day of trading and remained below their sale price until now. Tudou raised $174m upon its flotation in August last year.
Goldman Sachs (Asia), Allen & Company and China Renaissance Holdings acted as financial advisers to Youku. It was also advised by law firms Skadden, Arps, Slate, Meagher & Flom, TransAsia Lawyers and Conyers Dill & Pearman.
Morgan Stanley Asia acted as the lead financial adviser and Credit Suisse acted as the co-financial advisor to Tudou. Law firms Kirkland & Ellis, Fangda Partners and Maples and Calder acted as legal advisers to Tudou.
Youku raised $210m in its flotation in December 2010.