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Sohu Declines Most in Two Weeks on Report Qihoo Deal Terminated

Aug. 13 (Bloomberg) -- Sohu.com Inc., the owner of China’s third-largest Web portal, fell the most in two weeks in New York after DoNews said negotiations to sell its search engine to Qihoo 360 Technology Co. ended.

American depositary receipts of Sohu slumped 5.4 percent to $61.05 at 1:58 p.m. in New York, paring a 29 percent rally this year. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. climbed 1 percent to 96.95.

Prolonged talks between Sohu and Qihoo made it more difficult for the two companies to reach an agreement on the sale of the search engine Sogou, Chinese technology news website DoNews said, citing unidentified persons. Sohu Chief Executive Officer Charles Zhang said in May that the company was seeking investment in its search unit to drive growth.

“The no-deal report is negative to Sohu because its stock gain over the past few months was mainly driven by speculation on selling Sogou to Qihoo,” Henry Guo, an analyst at ABR Investment Strategy LLC, said by phone from San Francisco. “People expected Sohu to receive both stock and cash from Qihoo for the sale.”

Eric Yuan, Sohu’s media manager, couldn’t be reached by phone after business hours in Beijing. Lee Roth, Qihoo’s external public relations manager at The Piacente Group Inc., didn’t immediately return a call seeking comment.

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net

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