Meituan-Dianping files Hong Kong IPO, said to raise over $4 billion

HONG KONG/SHANGHAI (Reuters) – China’s Meituan-Dianping, an online food delivery-to-ticketing services platform, filed for a Hong Kong IPO on Monday, an offering that aims to raise more than $4 billion, three people with knowledge of the plans said. The firm, backed by gaming and social media firm Tencent Holdings Ltd (0700.
HK), did not detail the amount of funds targeted or a time frame. Meituan-Dianping is likely to list in October, said the people, speaking on condition of anonymity.
It was valued at around $30 billion in a fundraising round last year. It is aiming for a $60 billion valuation with the IPO, though industry insiders said it may have difficulty reaching that target as it’s still money-losing and relies on cash-burning business model to boost growth.
The company declined to comment on the deal size or potential valuation. Meituan-Dianping was formed in 2015 from the $15 billion merger of Meituan, likened to U.
S. discounting platform Groupon Inc (GRPN.
O), and Dianping, akin to U.S.
online review firm Yelp Inc (YELP.N).
It faces fierce competition from food delivery giant Ele.me, backed by e-commerce firm Alibaba Group Holding Ltd (BABA.
N), as well deep-pocketd new market entrants such as ride-hailing app operator Didi Chuxing. The firm unveiled a 19 billion yuan ($2.
9 billion) loss for 2017, steeper than in the previous two years. But its adjusted net loss – which excludes the impact of fair value changes of convertible redeemable preferred shares and other items – was 2.
85 billion yuan, smaller than losses of 5.35 billion yuan in 2016 and 5.
91 billion yuan in 2015. Revenue rose to 33.
9 billion yuan in fiscal 2017, sharply higher than the 12.99 billion yuan made in the prior year.
The filing comes as investors ready for a series of Chinese tech-related IPOs. Smartphone maker Xiaomi Corp on Thursday launched a blockbuster Hong Kong IPO, aiming to raise up to $6.
1 billion in the biggest tech-related listing worldwide since Alibaba’s record-breaking $25 billion in 2014. China Renaissance Group, a tech-focused investment bank led by one of the country’s most famed rainmakers, is also planning a Hong Kong IPO, keen to raise as much as $800 million, people with direct knowledge of the matter told Reuters.
Meituan-Dianping’s other backers include venture capital firms Sequoia Capital and DST Global, Singapore sovereign wealth fund GIC Pte Ltd and state-owned investment company Temasek Holdings (Private) Ltd, as well as the Canada Pension Plan Investment Board. The firm has mandated Bank of America Merrill Lynch, Goldman Sachs Group Inc (GS.
N) and Morgan Stanley (MS.N) to jointly sponsor its IPO.
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