(Reuters) - China's Sogou Inc SOGO.N said on Monday shareholder Tencent Holdings 0700.HK has made a preliminary offer to buy the rest of the web search firm it did not already control, in a deal that valued the company at about $3.5 billion.
Tencent, which beneficially owns about 39.2% of the total issued and outstanding shares of Sogou, has offered $9 per share in cash, a premium of 56.5% to the last close of Sogou’s U.S.-listed stock.
Sogou’s shares climbed to $8.39 in early morning trade.
Sogou made its debut on the U.S. market in November 2017 and raised $585 million at $13 per share.(reut.rs/3f5J1GW)
Tencent intends to finance the transaction with cash on hand and has won the backing of Sohu CEO Charles Zhang, who owns about 6.4% of Sogou, the Chinese tech giant said in a letter addressed to the target’s board.
A special committee of the board, composed solely of independent directors, will consider the proposal, Sogou said.
Reporting by Ayanti Bera in Bengaluru; Editing by Shinjini Ganguli and Sriraj Kalluvila
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