Baidu terminating YY Live deal a positive, says Daiwa

Daiwa keeps a Buy rating on Baidu (BIDU) after the company exercised its contractual right to terminate the share purchase agreement between Moon SPV Limited, Baidu, Joyy (YY) and other parties. The analyst believes the termination of the deal is positive to Baidu as it will not have to pay the remaining $1.7B to Joyy. If Baidu can retrieve part of the $1.9B it has paid to Joyy, it will be a further positive outcome for Baidu, the analyst tells investors in a research note. Given that the demand for online live streaming business has changed substantially over the past three years after deal was made in 2020, Baidu was unlikely to realize the anticipated benefits from the integration of YY Live into its business, says Daiwa.