AutoNavi announced Alibaba wants to acquire the company for $21 per share in cash, with the deal funded from cash on hand.
Beijing-based AutoNavi said its Board of Directors received a non-binding proposal letter, dated Feb. 10, 2014, from Alibaba that proposes a "going-private" transaction.
The company announced it will form an independent group of directors to asses the proposal. It will also retain financial advisors and legal counsel to help asses the propsal.
Alibaba, which is 24% owned by Yahoo! (YHOO), already owns 28% of AutoNavi, which provides digital map content, and navigation and location-based solutions in China. In addition to the strategic relationship with Alibaba, AutoNavi has mapping partnerships with TomTom and SINA (SINA).
By bringing AutoNavi into the fray, Alibaba, which is one of the largest Internet companies in the world, will allow AutoNavi's mapping solutions to better compete in the marketplace. Baidu (BIDU) recently launched its own mapping application. "The market for navigation and map applications and services has become increasingly challenging, as several larger, well-capitalized Internet players in China have become major competitors to the Company," Alibaba Director Joseph Tsai wrote in a letter. "We believe that Alibaba is uniquely position to offer super value to AutoNavi's shareholders based on our complementary, rather than competitive, business strategies and the potential synergies we can achieve from a full combination."-- Written by Chris Ciaccia in New York
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