Alibaba has agreed to increase its bid to acquire Chinese online video service Youku Tudou. The e-commerce giant increased its offer to USD 27.60 per Youku Tudou ADS, up from USD 26.60 when the company first announced its intentions in mid-October. The price is a premium of 35.1 percent on Youku Tudou's share price on 15 October, the day prior to the initial announcement and a 49.9 percent premium on the average share price in the three months prior. Youku Tudou's board recommended the improved offer to shareholders, based on the recommendation of an independent special committee set up to evaluate the offer.
Alibaba already has a stake in the company of 18.3 percent and taking control of Youku Tudou will support Alibaba's plans to expand into the content market. Alibaba said the deal would expand the existing partnership between Alibaba and Youku, and combine Alibaba’s data-driven platforms in e-commerce, media and advertising with Youku’s digital video franchise. Youku’s large user base, especially in mobile, and its popular platforms with high user engagement would form one of the key pillars of Alibaba’s digital entertainment strategy.
