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Baidu (NASDAQ:BIDU) is reportedly holding talks with interested parties about the sale of its controlling stake in iQIYI Inc (NASDAQ:IQ) in a deal that values the Chinese online video platform at $7 billion, Reuters reports.
Nasdaq-listed iQIYI has a market cap of $3.74 billion, based on yesterday’s close of $4.67. The $7 billion valuation would equate to a share price of $8.13.
Baidu has a 53% stake in iQIYI while controlling more than 90% of its shareholder voting rights. The Chinese giant is looking to offload its shares after deciding that iQIYI is a non-core asset.
“This is purely market rumour,” iQIYI said in an emailed statement to Reuters.
Hong Kong-based private equity firm PAC and China Mobile are reportedly interested, in addition to several financial sponsors and state-owned companies.
iQIYI shares are up 1.3% in pre-market Wednesday while Baidu stock price is trading 4% higher.
