Chinese internet company Qihoo 360 has entered into a definitive merger agreement. Qihoo 360 will be acquired by a consortium of investors in an all-cash transaction valued at approximately USD 9.3 billion, including the redemption of approximately USD 1.6 billion of debt.
Under the terms of the agreement, at the effective time of the merger, each of Qihoo 360’s class A and class B ordinary shares issued and outstanding immediately prior to the effective time of the merger will be cancelled and cease to exist in exchange for the right to receive USD 51.33 in cash without interest, and each American Depositary Share (ADS) of the company, every two ADSs representing three class A ordinary shares, will be cancelled in exchange for the right to receive USD 77 in cash without interest.
The investor consortium includes, among others, Citic Guoan, Golden Brick Silk Road Capital, Sequoia Capital China, Taikang Life Insurance, Ping An Insurance, Sunshine Insurance, New China Capital, Huatai Ruilian, Huasheng Capital or their affiliated entities. Qihoo 360’s board and a committee of independent and disinterested directors have recommended the bid to shareholders.
The consortium intends to fund the merger through a combination of cash contributions from the investors, and the proceeds from a committed term loan facility in an amount up to the CNY equivalent of USD 3 billion and a bridge loan facility of up to the CNY equivalent of USD 400 million. The Qihoo 360 board of directors has approved the merger agreement. The merger is expected to close during the first half of 2016. Qihoo first listed on the stock market in New York in 2011.