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Investor Acacia Challenges Baidu on Sale of Video Unit to CEO

Baidu Inc Photographer: Tomohiro Ohsumi/Bloomberg

Acacia Partners LP, an investor in Baidu Inc., criticized the search company for considering a sale of its video unit to a group led by its chairman at a price that is “far too low.”, a Netflix-like streaming platform, should be a valuable and important contributor to the company and a sale is against Baidu’s interests, the hedge fund said in a letter to Li that was made available to Bloomberg News. It cited valuations on the business of $5.8 billion compared with the $2.8 billion valuation suggested in a buyout offer put forth by Li and chief executive Yu Gong in February.

Acacia said it owned more than 2.6 million shares in Baidu worth over $400 million, according to a letter distributed to media by...