Youku Tudou not targeted for buyout by Baidu video sharing service iQiyi, firm says
Chinese online video provider iQiyi has denied rumours that it is being acquired by competitor Youku Tudou, according to Chinese media reports.
Rumours that Youku Tudou will buy Baidu-backed iQiyi and would complete the acquisition within the next two months began circulating on Friday. This is the second time in which iQiyi has refuted such rumours.
iQiyi chief executive Gong Yu personally denied reports that Yukou Tudou was seeking to buy his company in May, shortly before his competitor released its most recent earnings.
However, unnamed sources told Chinese media that iQiyi’s ongoing internal process of splitting up its variable interest entity (VIE) structure will be completed before the end of the year. Reports suggest that iQiyi may be among the first batch of companies to list on the Shanghai Stock Exchange once the suspension of IPOs has been lifted.
The VIE structure allows a mainland Chinese company to form a new corporation abroad that can get listed overseas, and controls the domestic company based on a set of agreements. iQiyi has yet to respond to queries about the dismantling of its VIE structure, or when it will go public.
In June, the company announced that it had attracted five million paid subscribers, with Gong calling iQiyi’s paid subscription model a “success”.
The video portal plans to beef up content and acquire 1,000 titles from Hollywood this year. The company also intends to churn out at least 30 self-produced dramas with a total of 500 episodes to cater to paid users’ demand for premium online content.