Rumor: Perfect World to Repurchase Baidu Literature for RMB 1.2 Bln
DoNews, 11/12/15
Beijing-based online game developer and operator Perfect World will reportedly spend RMB 1.2 bln to acquire internet company Baidu's (Nasdaq: BIDU) "Baidu Literature" online and mobile literature business division, according to a source familiar with the matter. The division includes Chinese literature, comics and animation website Zongheng.com, mobile reading application 91 PandaReader, and Android mobile reading app Duoku Shucheng. Negotiations are said to be nearly completed and an official announcement is expected soon. Industry analysts say that Perfect World may be acquiring Baidu Literature and its highly-regarded intellectual property to increase its valuation in anticipation of a return to China for an A-shares listing.
Zongheng was established in 2008 as China's only reading website for original Chinese-language literature, and received early investment from Perfect World. In 2013, Perfect World sold Zongheng to Baidu for RMB 191.5 mln. Baidu launched Baidu Literature in November 2014 by combining Zongheng, Duoku Shucheng, and 91 PandaReader. If Perfect World acquires Baidu Literature for RMB 1.2 bln, this will amount to a six-fold repurchase price premium for Zongheng, as packaged with the additional resources integrated by Baidu.
Editor's note:For more information on this topic, please see "Perfect World to Vote on Merger Proposal," MD 6/25/15, "Perfect World Confirms Baidu Acquisition of 'Zongheng' Literature Site," MD 12/27/13 and "Baidu Launches Online Literature Division," MD 11/28/14 issues.
Keywords: Perfect World Internet mobile literature Baidu online literature Zongheng BIDU 91 PandaReader Duoku Baidu Literature M&A
Sending
