BAIDU Inc., the Chinese Internet search company, has received an offer from two executives to buy all of its majority holding in Qiyi.com Inc.

    Robin Li, Baidu chairman and chief executive officer, and Gong Yu, CEO of Qiyi, offered to buy the 80.5 percent stake in the video-streaming website, which has an enterprise value of US$2.8 billion, Baidu said in a statement Friday.

    By spinning Qiyi out from Baidu, Li and Gong essentially will take the video service private, which will then allow them to seek an initial public offering (IPO) in China, said Henry Guo, an analyst at Summit Research Partners. That’s because the operations would receive a high valuation from Chinese investors that they wouldn’t get in the United States, he said.

    “If you IPO in China, because of the brand awareness, you may get a really high premium,” he said. “In China, people don’t care whether or not you’re profitable yet.”

    Li said last March that he would sell Baidu shares to the Chinese market if permitted by regulators.

    Qiyi is one of the top three online video operators in China and its valuation on the public market should be boosted by the recent Alibaba Group Holding Ltd. acquisition of Youku Tudou Inc., Guo said. Alibaba in November agreed to buy Youku in a deal that has been said to be valued at US$4.8 billion.

    Qiyi joins a slew of Chinese companies listed on U.S. stock exchanges that have received buyout offers over the past year. While Chinese stocks haven’t fared well in recent months, adding to the risk of an IPO, Qiyi should still attract abundant interest, Guo said. (SD-Agencies)