The unverified takeover rumor of Rediff.com by Internet giants Google and Yahoo are milling around the internet. The rumor came from the HIndustan Times, who reports “US-based Internet giants such as Google and Yahoo are eyeing Rediff.com India Ltd, which runs one of India’s most popular consumer Internet portals, for a possible acquisitionâ€.
The Hindustan Times quotes “investment banking sources†saying that the management of Rediff “was in talks with the global companies for a negotiated takeover dealâ€.
Rediff.com is a NASDAQ listed company and leader in the Indian market, providing news, information, communication, entertainment and shopping services for Indians both in India and worldwide.
Recently, JuxtConsult, a Delhi-based online research firm, has reported in its annual study on the Indian Internet space that Rediff is the second most preferred site for online shopping after eBay (excluding online travel websites).
Rediff share price has risen recently in last couple of days on speculation that the company may be a takeover target. The company’s stock moved up to $25.41 per share on July 13 from $17.94 on July 5 and. The trading volume has increased to more than a million shares from an average of 50,000 share a day. In fact, on July 12, Rediff shares closed at $26.46 and more than 3.3 million shares traded hands. The company has a current market capitalisation of $738 million.
With the company’s surging stock price in NASDAQ, and if the deal goes through, it may be valued at around $1 billlion.
On the other hand, Rediff CEO Ajit Balakrishnan has rejected this rumor on his email to to AlooTechie.
Rediff CEO says,
It’s completely untrue and this report was written without verifying with us if the speculation has any basis; there are no discussions of this nature going on. It is clearly an instance of a reporter’s over-active imagination on a slow news day and his editor not bothering to ask him if he has checked with the company concerned.
