Chinese bike-sharing startup Ofo Inc. could soon be acquired by Chinese ride-hailing firm, Didi Chuxing, a report from the Financial Times said.
The two ridesharing companies were rumored to have rekindled acquisition talks July this year. Two months before that, Ofo founder and CEO, Dai Wei rejected an earlier buy-in offer by Didi boss, Chen Wei.
Dai Wei insisted that Ofo should remain independent and free from any corporate reins. This consequently canceled the first talks.
There still weren't any exact figures involved with this recent merger plans. However, several sources are pointing out Didi's Wei hinting of a USD$1.5 billion price tag - nearly halfway down from what Ofo's rival, Mobike, received during the Meituan Danping buy-in.
Ofo's Dai Wei, however, is reportedly looking at a much higher margin. Still, there are reports saying that Ofo might have to settle around this price as Didi is coming back to the table with a lower offer for each negotiation.
Aside from Didi Chuxing, other firms like Alibaba and Ant Financial are also vying to take hold of the bike-ride company, although the two investment giants are only willing to shell out prices much lower than Didi could.
Earlier this year, Ofo has started to pull back its overseas operations like in Australia, India, Israel, and other territories in the nearby region. Previous reports are also saying that the company was also shutting down its services in the US after entering its market almost a year ago.
Factors like theft, vandalism, and poor handling of bikes, contribute to Ofo's decision to pull the plug from those cities.
Despite this pressing issues abroad, Ofo is still determined to continue serving other cities like London, Paris, Milan, and Singapore. The latter's case has yet to push through as the company is now in the middle of negotiation with the Singaporean government regarding its license to operate within the country.
Should the Ofo-Didi deal goes through, Ofo will be the second major bike-sharing service to be acquired by Didi. Just this year, Didi bought another startup, Bluegogo, after the latter revealed a serious cash shortage which the company needs to keep the wheels turning.
Unlike Ofo, Bluegogo, and Mobike, other bike-sharing names like Coolqi and Mingbike failed to stay afloat due to the fierce competition going on in the niche. The two were forced to file bankruptcy last year.
Meanwhile, since its founding in 2014, Ofo was able to raise its market value to USD$2.2 billion.
