Chinese internet company Qihoo 360 is looking to force Coolpad to purchase its 49.5 per cent stake in handset venture Coolpad E-commerce, citing “a series of breaches” of non-compete clauses.
In a statement, Qihoo 360 said that it has an option to sell its stake to Coolpad at a total price equal to twice its fair-market value, should it breech the terms of the shareholders agreement. This, it said, gives a value of $1.49 billion – although it also cautioned this is not a guaranteed outcome.
Qihoo 360 and Coolpad announced their alliance late last year, with Qihoo subsequently increasing its stake in May, in a move it said “underscores our increased confidence in the future of this jv”.
While the internet player did not name names, it has previously expressed concern about a tie-up between Coolpad and Letv, a Chinese online video company. Letv has bought a significant stake in the device maker.
The Qihoo 360 and Coolpad venture was established to create mobile devices which are sold via internet channels, using a similar model to rivals such as Xiaomi and Meizu.
The first devices resulting from the partnership were announced under the Qiku brand last month, with smartphones that “come with features not found on any other phone on the market”.
Among the features trumpeted was insurance (up to around $18,000) to protect users against mobile fraud, secure payments using a dedicated VPN connection, the ability to hide documents stored on the device via PIN, and a team of 2,500 security engineers working to ensure that smartphones are secured against phishing, viruses and malware.
The line comprised of high-end (Q Terra) and entry-level (Q Luna) models for all markets, plus a mid-range device for China.
And the companies had high aims, with initial distribution in China to be followed by India and Indonesia later this year, and “additional countries, including Brazil, Russia and Turkey”, to follow.