Spoiler alert

25 July 2016 By Robyn Mak Follow @mak_robyn

The CEO of China’s top search engine has scrapped a $2.8 bln bid for the group’s video arm days after an investor voiced concerns. Selling the loss-making unit would have boosted margins. But shareholders had little insight into the unit’s prospects or the boss’s motives.

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Baidu, China's most popular search engine, said on July 25 that Chairman Robin Li and Yu Gong, the chief executive officer of Baidu's video unit Qiyi.com, had withdrawn their non-binding offer to acquire Qiyi.

The company said the buyer group, led by Li and Gong, and Baidu could not reach an agreement "on transaction structure and purchase price after rounds of discussions and negotiations".

On July 19, an investor in Baidu, U.S.-based firm Acacia Partners, sent a letter to Li urging him to withdraw his offer. Acacia said the proposed sale of Qiyi was priced too low and would damage the company's reputation.

Baidu received an offer for its 80.5 percent stake in Qiyi from Li and Gong in February. The offer valued Qiyi, China's second-biggest online video provider through its iQiyi service, at $2.8 billion on a cash- and debt-free basis.

Shares of the U.S.-listed Baidu were down 1.5 percent at $158.41 by 9:50 a.m. EDT (1350 GMT).

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The company said the buyer group, led by Li and Gong, and Baidu could not reach an agreement "on transaction structure and purchase price after rounds of discussions and negotiations".

Shares of the U.S.-listed Baidu were down 1.5 percent at $158.41 by 9:50 a.m. EDT (1350 GMT).

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