NEW YORK (TheStreet) -- Shares of AutoNavi Holdings Ltd. (AMAP) are up 2.49% to $20.55 after it was announced that the Chinese digital mapping and navigation firm agreed to be acquired by e-commerce firm Alibaba Group Holding Ltd. in a deal valuing the company at about $1.5 billion.
Alibaba owns 28% of AutoNavi, and offered to buy the company in February to expand its product offerings to better compete with rivals Tencent Holdings Ltd. and Baidu Inc. (BIDU), Reuters reports.
AutoNavi said the company's shareholders will receive $5.25 per ordinary share, or $21 per American Depositary Share, a premium of 4.7% to AutoNavi's closing price on the Nasdaq yesterday.
TheStreet Ratings team rates AUTONAVI HLDG LTD as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AUTONAVI HLDG LTD (AMAP) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."