Baidu chief drops proposed buyout of iQiyi

Baidu chairman and CEO Robin Li has withdrawn his offer to take streaming site iQiyi private following objections from a major Baidu shareholder.

New York-based hedge fund Acacia Partners challenged the deal last week, claiming the proposed sale price was far too low (see story here).

Baidu announced in February that it was selling an 80% stake in the online video site to Li and iQiyi founder Gong Yu in a deal that valued the platform at $2.8bn.

In a statement, Baidu said the two sides had failed to reach an agreement on price and transaction structure after rounds of negotiations. A special committee within Baidu had examined the deal.

Baidu added that online video is still “an important vertical” for the company, which is China’s leading search engine and like its digital rivals has diversified into other activities. “Baidu will continue to support iQiyi in its continued growth and leadership in the industry,” the statement said.