NEW YORK (TheStreet) -- Shares of Qihoo 360 Technology (QIHU) are gaining by 8.69% to $71.79 at the start of trading on Wednesday morning, after the China-based Internet company announced it has received a buyout offer from Qihoo CEO Hongyi Zhou and a consortium of other affiliates of $77 per ADS.
The offer represents a 16.6% premium to the Qihoo's Tuesday closing on the NYSE, Reuters reports.
Qihoo said its board will form a special committee consisting of independent directors to consider the proposal.
The company cautioned shareholders to keep in mind that the board has only just received the proposal letter and that it has not had the chance yet to carefully review the offer.
"There can be no assurance that any definitive offer will be made, that any definitive agreement will be executed relating to the proposed transaction or that this or any other transaction will be approved or consummated," Qihoo said in a statement.
Insight from TheStreet Research Team:
TheStreet's Jay Somaney commented on Qihoo in a post today on RealMoney.com. Here is what Somaney had to say about it:
If I were to tell you that Wall Street expects revenue and earnings growth of 34% and 39% next year for a company, would you be interested? And how about if the company had almost $17 per share in cash and currently traded a lowly 13.7x next year's estimated consensus estimates? Would that further pique your interest?