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Tencent offers to take Chinese search giant Sogou private

A banner hangs for China-based Sogou Inc. to celebrate their IPO at the New York Stock Exchange. (Reuters)

China's Sogou Inc. said on Monday shareholder Tencent Holdings 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 U.S. dollars.

Tencent, which beneficially owns about 39.2 percent of the total issued and outstanding shares of search giant Sogou, has offered 9 U.S. dollars per share in cash, a premium of 56.5 percent to the last close of Sogou's U.S.-listed stock.

Sogou's shares climbed 48 percent on Monday to 8.51 U.S. dollars.

The company was founded in 2005 by Sohu.com Inc. and generates revenue mainly through search advertising services. Its Chinese rivals include Baidu Inc. and Alibaba's UCWeb.

Sogou made its debut on the U.S. market in November 2017 and raised 585 million U.S. dollars at 13 U.S. dollars per share.

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 percent 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.

(Source: CGTN)

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