Alibaba, Tencent woo iQIYI

Business | 27 Nov 2020 7:23 pm

Alibaba (9988) and Tencent (0700) have each held separate talks with Baidu to acquire a controlling stake in video streaming service iQIYI, people with knowledge of the matter told Reuters.

But the discussions have stalled with little hope of recommencing soon as they balk at a valuation of around US$20 billion (HK$156 billion) demanded by Baidu and as both companies, which have their own video streaming services, face heightened scrutiny by China’s antitrust regulators, two people said.

TikTok owner ByteDance has also internally looked at the possibility of acquiring a controlling stake in iQIYI, three sources said.

Nasdaq-listed iQIYI has a market capitalization of US$16.4 billion, which values Baidu’s 56.2 percent stake at about US$9.2 billion. Tencent, whose interest in iQIYI was first reported by Reuters in June, believes the company is worth about half of what Baidu wants, said two of the people.

Baidu, iQIYI and Tencent declined to comment on the deal talks. ByteDance declined to comment on the extent of its interest in iQIYI. Alibaba did not respond to a request for comment.


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