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In a bid to reign China's upbeat online-to-offline market over tough competition against Jack Ma's Alibaba, China's Meituan Dianping is reportedly launching an initial public offering in Hong Kong at a range between $7.64 and $9.17 per share. The online food delivery-to-ticketing services platform is targeting a market valuation of up to $55 billion in this latest move to go public.
The company will start welcoming investors by Sept. 4 until Sept. 12 according to people familiar with the matter who spoke with Bloomberg. The final share price is reported to be finalized by Sept. 12 and shares will start trading by Sept. 20 according to the unnamed sources.
Meituan's launch to IPO has reportedly attracted five cornerstone investors namely Tencent Holdings Ltd., New York-based Oppenheimer Holdings Inc., Chinese state-owned conglomerate China Chengtong Holdings Group, and hedge funds Darsana Capital Partners LP.
Tencent is planning to invest as much as $1.5 billion, the sources said. Oppenheimer plans to shell out $500 million, Darsana and Lansdowne $200 million, and Chengtong Holdings $100 million.
Reuters stated that its launch in Hong Kong IPO will allow Meituan to upgrade its technology, expand its online services and products, and to pursue more acquisitions. If the company's planned floatation goes according to plan, Meituan will become Beijing's second-largest multibillion-dollar entry to IPO this year. It will follow the lead set by Xiaomi's $5 billion IPO early this year.
Initial prospectus seen by Bloomberg revealed that Goldman Sachs Group Inc., the Bank of America Corp., and Morgan Stanley are going to be the joint sponsors for the offering. China Renaissance Holdings Ltd., meanwhile, will be Meituan's sole financial adviser.
All parties involved and mentioned in both reports refused to give comments as of press time.
China's online-to-offline market, where smartphones apps are linked to bricks-and-mortar businesses for consumers to place online orders delivered right at their footsteps, is currently valued at $146 billion which was up by 72 percent from 2017, Reuters noted in a separate report citing data from Chinese research firm Analysys.
Other analysts were noting the rapid rise of the market in the country. Alibaba and Meituan are currently the only two platforms racing to dominate the market.
Early in August, Alibaba has reportedly decided to merge its food delivery platform Ele.me and lifestyle services firm Koubei to position itself ahead of Meituan, especially that the latter has the backing to Tencent. The merger will be launched as a new separate entity that could be valued at up to $25 billion according to sources familiar with the merger.
