Baidu's acquisition of YY live broadcast for $3.6 billion is full of twists and turns. In order to refute the query of muddy water report on the authenticity of the company's business, joy gathering group (YY) said it could provide cash balance at home and abroad and bank deposit statements, which were confirmed and investigated by competent third-party institutions.Whether Baidu has done a detailed due diligence on YY and whether to continue to acquire YY live broadcast has become the focus of industry discussion for a time.
Hun Shui founder Carson Bullock (Carson Block) in a recent interview more empty shouting Baidu: if they (Baidu team) have not done due diligence, should be carried out as soon as possible. If they have done their due diligence, it should be easy to find the problem of gathering that we notice.
A person close to the deal said on the morning of november 27 that baidu had commissioned detailed due diligence from a number of third parties, including pricewaterhousecoopers, on the deal for baidu's acquisition of YY, covering areas such as finance and legal affairs.
According to the above-mentioned people, it is common sense in the industry to conduct due diligence on the income health of the acquisition target. Judging from the content of the report disclosed by muddy water, the due diligence of PWC and other institutions on the acquisition target was more detailed.
According to the final binding agreement signed by huanju group and Baidu, Baidu will purchase huanju's domestic video entertainment live broadcasting business (i.e. YY live broadcast) with cash of about $3.6 billion (adjusted according to the agreement or consideration), including but not limited to YY mobile applications YY.com The transaction is expected to be completed in the first half of 2021. In this transaction, baidu values YY's complete set of mature live broadcasting system, and YY's live broadcasting service is connected to Baidu's huge flow pool to accelerate business growth and release greater value. But at this time, muddy water publicly said on social media that it was shorting listed companies in the US stock marketThe age of reunion, claiming that 90% of the revenue of the live broadcast business of happy gathering is fake, and 80% of the income of bigo live, an overseas version of the gathering era, is fake. Huanju group shares fell more than 20%.
After being short by muddy water, will Baidu's acquisition of YY press the pause button?
"Acquisition is a very serious legal issue, and the acquisition agreement will fully protect the rights and interests of the buyer. If YY financial fraud, Baidu has the right to terminate the acquisition. " An investment circle personage said to reporters, "now this situation, for Baidu, if the acquisition, there is a further bargaining chip with YY; if the data fraud is found in the further verification, you can leave at any time."
You Yunting, senior partner of Shanghai Dabang law firm, said in an interview with the first finance and economics reporter that the binding agreement signed by Baidu and huanju did not mean that the deal was settled. Because many delivery conditions will be stipulated in the agreement. If the acquiree fails to meet these delivery conditions, for example, the data is not true after financial audit, the transaction will not be able to be delivered. Generally speaking, after the muddy water report is exposed, Baidu will definitely increase the intensity of due diligence, including data investigation and financial data investigation.
"If Baidu made an investment decision after conducting in-depth investigation, I think it is very likely to continue this transaction, but I do not rule out that it will ask for a lower transaction price for the severity reflected in the muddy water report. If problems are found, Baidu can ask the shareholders of YY company to make a reasonable explanation. If the explanation is unreasonable, it can cite the contract terms to determine that the delivery conditions are not fulfilled, and it may terminate the transaction. " You Yunting told reporters.