Baidu investor criticises proposed sale of video unit to CEO

BEIJING: Baidu Inc’s planned sale of online video unit iQiyi to its own chief executive is priced too low and will damage its reputation, an investor in the Chinese internet company said.

In February, Baidu received an offer for its 80.5% stake in iQiyi from Robin Li and Yu Gong, the chief executives of Baidu and iQiyi, respectively. The offer valued the whole of iQiyi, China’s second-biggest online video provider, at US$2.8bil on a cash- and debt-free basis. “We worry that embracing what is an inherent conflict of interest will lead to damage to the reputations of both you and Baidu,” US-based investment firm Acacia Partners said in a July 18 letter to Li. The letter was distributed to media through public relations firm Finsbury, part of communications firm WPP.