Qihoo Gets $9 Billion Buyout Offer From CEO
Carlos Tejada / Wall Street Journal :
Context & Ripple Effects
In June 2015, Qihoo 360's CEO moved to take his own company off the NYSE with a $9 billion offer — the largest in what was becoming a recognizable playbook for US-listed Chinese tech firms whose founders believed Wall Street undervalued them. The bid landed, and by December the take-private had closed at about $9.3 billion, making it one of the biggest Chinese buyouts of that cycle.
What followed validated the template: within weeks, Baidu's CEO paired with Qiyi's chief to bid for Baidu's 80.5% stake in Qiyi at roughly $2.8 billion, another founder-driven carve-out from US public markets. The Qihoo deal was the proof-of-concept that management teams could price their own companies out of American exchanges and back into Chinese control.
First-order effects
- Qihoo's public shareholders face a take-or-leave choice on the CEO's $9 billion bid, which ultimately closed at about $9.3 billion in December — an immediate liquidity event priced by insiders rather than the market.
- The CEO and his consortium gain full control of one of China's largest security software companies, freeing it from US listing requirements and quarterly disclosure.
Second-order effects
- Rival founders and controlling shareholders read the closed deal as a pricing benchmark: Baidu's and Qiyi's CEOs filed their own buyout offer for Qiyi within two months, applying the same insider-bid structure to a streaming asset.
- US investors holding US-listed Chinese ADRs begin discounting governance risk — if a founder can take the company private on his own terms, the minority holder's exit depends on that founder's valuation.
Third-order effects
- If the pattern holds, US-listed Chinese tech companies bifurcate into those chasing Western capital markets and those re-domiciling toward Chinese exchanges and domestic funding — a structural repricing of what a US listing is worth to a China-based founder.
- The wave also reshapes where these companies eventually resurface: several of the era's private or newly funded players (Zhihu, Qutoutiao) later returned to markets through domestic backers like Kuaishou, Tencent, and downsized IPOs, suggesting the take-private was a waypoint rather than an endpoint.
The trend: US-listed Chinese tech companies are being taken private by their own founders at scale, as management teams conclude domestic control and eventual re-listing beat Wall Street valuations.