Chinese consortium values internet firm Qihoo 360 at $10 bn

A Chinese consortium led by the chairman and CEO of leading internet firm Qihoo 360 Technology Co Ltd has offered to buyout the company which is valued at approximately $10 billion, in a latest trend of top executives eager to take their US-listed Chinese firms private.

The buyers' consortium includes Hongyi Zhou, the chairman and CEO of Qihoo, and Chinese investment companies CITIC Securities Co Ltd, Golden Brick Capital Private Equity Fund I LP, China Renaissance Holdings Ltd and Sequoia Capital China I LP.

Under a non-binding proposal, the consortium has offered to buy all of the outstanding class A and class B ordinary shares of the company, including class A ordinary shares represented by American depositary shares for $51.33 in cash per class A or class B share, or $77 in cash per ADS, the internet firm said in a statement.

The offer represents a 17-per cent premium to Qihoo ADS' closing price of $66.05 on Tuesday on the New York Stock Exchange. Further to the news, the stock jumped 6 per cent to $70.12 yesterday.

Based on 196 million diluted outstanding shares, the company is valued at about $10 billion. Zhou owns 16-per cent stake in the company, while the management overall holds nearly one-third, according to a recent filing.

Qihoo said its board will form a special committee which will include independent directors, financial and legal advisors, to consider the proposal. The company cautioned its shareholders and investors that it did not have the opportunity to review and evaluate the proposal to arrive at a decision.

''There can be no assurance that any definitive offer will be made, that any definitive agreement will be executed relating to the proposed transaction or that this or any other transaction will be approved or consummated,'' Qihoo said.

Beijing-based Qihoo is a leading provider of internet and mobile security products in China. It also provides users with secure access points to the internet via its market leading web browsers and application stores.

Qihoo's core internet and mobile security products include 360 Safe Guard, 360 Anti-virus and 360 Mobile Safe.

The company has built one of the largest open internet platforms in China and monetises its massive user base primarily through online advertising and through Internet value-added services on its open platform.

In April, Qihoo bought a 45-per cent stake in Chinese smartphone maker Coolpad Group Ltd to increase its presence in the mobile industry.

Its CEO Zhou is well known in Chinese internet industry for his clashes with heavyweights such as Baidu Inc and Tencent Holdings Ltd. He has criticised bigger firms for suppressing innovation.

Qihoo reported a 45-per cent jump in revenue at $384 million in the first quarter with an 8-per cent rise in profit at $53 million.

Other recent attempts to take the companies private include Chinese hotel chain Homeinns Hotel Group,  data centre firm 21 Vianet Group Inc and social networking site Renren Inc.