Sohu, one of China’s Internet pioneers, is offering to buy out its games subsidiary Changyou in a deal that values Changyou at $532 million. Both companies currently have their shares listed on NASDAQ, but if the deal goes ahead Changyou would lose its separate stock listing.

Sohu, which has interests covering search, digital advertising and games, is offering $5 cash per A share, and $10 per ADS (which represents two A shares). That is some 69% ahead of the price of Changyou shares at the close of share trading on Friday, and pre-market indicators point to Changyou’s ADS leaping to over $9.

Having long ago been overtaken by Baidu, Alibaba and Tencent, Sohu has struggled. Profits have slipped for five consecutive quarters, and revenue in the last reported three-month period came in at only $475 million. In August, its shares hit their lowest valuation in 16 years.

Sohu did little to explain its non-binding take private offer. However, the move to absorb Changyou would appear to be driven by consolidation and cost-cutting potential, It may also be aiming to take advantage of weakness in the Changyou share price, which also hit an all-time low in August.

Changyou develops and operates a portfolio of PC and mobile games, such as “Tian Long Ba Bu,” one of the most popular PC games in China. Changyou also owns and operates the 17173.com website, a Chinese-language game information portal.