Chinese buying website mulls 2018 US IPO

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Another Chinese business highflier is said to be considering an initial public offering in the US.

Reuters, quoting five people with knowledge of the matter, said a listing by China’s Meituan-Dianping, an online platform for ordering food and booking movies and restaurants, could happen as soon as next year.

The offering raise at least 3 billion US dollars as the company’s investors look to capitalize on the current market bull run, which has taken US stocks to a series of all-time highs.

A deal of that size, representing at least 10 percent of Meituan-Dianping’s valuation, would be the largest listing of a Chinese company in the US since Alibaba’s record float of 25 billion US dollars in 2014.

Meituan-Dianping, which offers a broad range of services including movie ticketing, food delivery and beauty services, said last month it had raised 4 billion US dollars in fresh funding, valuing the company at 30 billion US dollars.

According to CB Insights, a data and analytics provider, that valuation ranked it as the world’s fourth-largest “unicorn” - technology start-ups valued at 1 billion US dollars or more.

Led by serial entrepreneur Wang Xing, Meituan-Dianping’s backers include Tencent, Sequoia Capital Ltd, Singaporean state investors GIC Pte Ltd and Temasek, as well as DST Global and Canada Pension Plan Investment Board.

An IPO could take place as early as the first half of 2018, according to one of the people involved.

Meituan-Dianping has started initial conversations with potential advisors to work on an IPO plan, two of the people said. Plans are still fluid and no bank has been mandated, according to the sources, who declined to be named as the discussions were not public.

The Meituan logo. /Reuters Photo

When contacted by Reuters about its IPO plans, a Meituan-Dianping spokeswoman declined to comment, adding the company’s focus is on investing the proceeds of last month’s fundraising.

“We are concentrated on implementing various initiatives that will build out our platform and offerings,” she said.

An IPO could help bolster Meituan-Dianping’s firepower for investments in offline retail and artificial intelligence technology - a strategy that would pitch it directly against China’s leading e-commerce heavyweights including Alibaba and JD.com Inc.

Going public would also require the company to disclose its financials and strategy at a point when many of its competitors are still privately held.

These include Alibaba’s food delivery unit Ele.me and ride-hailing champion Didi Chuxing. Earlier this year Meituan-Dianping began to challenge Didi by offering ride-hailing services.

Meituan-Dianping was formed in 2015 from the 15 billion-US-dollar merger of Groupon-like Meituan and Yelp-like Dianping. It now has 280 million users and serves as a platform for roughly 5 million businesses.

“The listing plans are more driven by the investors as several of them look to cash out after years of investments. But the company isn’t in a rush to go public as it doesn’t lack capital for development,” said one of the sources.

In July, Meituan-Dianping’s vice-president of strategy Chen Shaohui told Reuters the firm would not consider an IPO until it had established infrastructure for services including offline retail, and that it had roughly 3 billion US dollars in cash reserves.

Both Alibaba and JD.com have championed a shift into offline stores in recent years, spurred by developments in cloud computing and big data technology.

Source(s): Reuters