Tencent purchase offer sends Chinese search engine’s share price soaring 48%

BEIJING: Chinese tech giant Tencent has offered to buy search engine Sogou in a deal worth around US$2 billion, sending the latter’s share price soaring 48% in New York.

The proposal would take Sogou private, with Tencent offering US$9 in cash for each American depositary share it does not already hold, said Sogou’s parent company Sohu.com on Monday.

Chinese tech companies have been looking into listings closer to home as tensions rise between the US and China on multiple fronts, and with US-listed Chinese firms coming under heightened scrutiny overseas.

Chinese e-commerce giant JD.com – which listed on the Nasdaq in New York in 2014 – made its Hong Kong debut in June, while Alibaba-affiliated online payments giant Ant Group said this month it has taken the first steps towards a dual listing in Shanghai and Hong Kong.

Sohu said it is considering the offer by Tencent, which holds nearly 40% of Sogou’s total issued and outstanding shares.

The US$9 per share offer represents a premium of around 56.5% to the closing trading price last Friday, Sohu added.

News of the potential deal sent Nasdaq-listed Sohu’s share price up almost 40%.

Sogou made its stock market debut in 2017, and currently has a market capitalisation of around US$3.3 billion.

Tencent is one of the world’s largest gaming companies and, like other tech giants, has benefited enormously from the billions of people around the world forced into lockdowns or restricted by social distancing rules.