Alibaba to take digital mapping company AutoNavi private in $1.58-bn deal
11 February 2014
Chinese e-commerce giant Alibaba Group Holding Ltd run by Jack Ma, yesterday offered to "take private" Chinese digital mapping and navigation firm AutoNavi Holdings Ltd in a $1.58-billion deal.
In order to stamp its presence in the mapping industry, Alibaba offered to buy the 72 per cent it does not already own in AutoNavi, in a all cash offer that values the mapping software company, at about $1.58 billion.
Alibaba said in a regulatory filing that it would pay $5.25 per ordinary share or $21 per American depositary receipt, (ADR), which represents four ordinary shares.
The offer represents a 26-per cent premium to AutoNavi's ADR closing price on Friday and a nearly 40 per cent premium to its 60-day volume-weighted average price.
''We believe that Alibaba is uniquely positioned to offer superior value to AutoNavi's shareholders based on our complementary, rather than competitive, business strategies and the potential synergies we can achieve from a full combination,'' Joseph Tsai, Alibaba's executive vice chairman, wrote in a letter to AutoNavi's board.
AutoNavi said in a statement, "According to the proposal letter, Alibaba intends to fund 100% of the cash consideration payable in the Transaction with its cash on hand and the Transaction will not be subject to any financing condition."
It said its board of directors will form a committee of independent directors to consider the offer.
In April 2013, Alibaba acquired a 28-per cent stake in AutoNavi for $294 million and became the largest shareholder of the Nasdaq-listed company after its CEO, Jun Hou, who holds 16.7- per cent stake. (See: Alibaba buys 28% in Chinese map-nav firm AutoNavi)
Beijing-based AutoNavi, which completed a $100 million IPO in 2010, is the most popular mapping app in China and competes with those of Google, Baidu and others.
It holds a 45-per cent market share according to research firm Analysys International and passed 100 million downloads in January 2013.
Apart from its mapping and navigation app, AutoNavi has business deals with other tech and auto companies like Apple, Micosoft's Bing, and Chinese search giant Baidu and Sina, and automakers like Audi, BMW and General Motors.
It provides built-in data in Apple iOS 6 and Google users in China, as well as mapping services to Baidu and dashboard navigation systems for cars to Audi, BMW and General Motors.