Qihoo 360 declared it intends to execute a put option to market its entire stake of 49.5 percent with partner Chinese smartphone developer Coolpad.
The two companies that teamed up in December 2014 for a venture valued at $1.5 billion had a clause in their contract that supports Qihoo 360’s claim for a put option which states, “at a total price equal to twice its fair market value, exercisable if Coolpad breaches its non-compete obligations under the shareholders agreement,” as per Barron’s Asia.
China’s top Internet company has announced that it already sent out a notice to Coolpad Group Limited. According to Market Watch, under the agreement of both companies, Qihoo 360 made its decision to execute its put option basing on a string of breaches by the smartphone maker of its pertinent non-compete obligations.
The joint investment between Qihoo 360 and Coolpad focused on mobile terminal merchandises that were dispersed through Internet as the immediate channel.
Aside from being the leading data highway company in China, Qihoo 360 Technology Co. Ltd. also leads in providing mobile security products in China. The company also provides its customers with secure access points via its market leading application stores and web browsers.
Qihoo 360 was also responsible for the building in China of one of the biggest accessible Internet platforms and issues its mammoth user base basically through Internet value-added services and online advertising on its open platform.
Telecompaper reported that in the notice that Qihoo 360 has sent out to Coolpad, the company has schemed a market value that is considered fair in the figure of U.S. $742.5 million for the stake of 49.5 percent, basing on a U.S. $1.5 billion value for the whole share capital of the joint investment. Relatively, the acquirement value payable by Coolpad amounted to U.S. $1.485 billion.
To read on the press release of Qihoo 360 regarding its declaration to exercise the put option click HERE.
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