|
The
management of China's largest online travel firm, with a current
market value of $16.5 billion, has reached out to a number of
financial and strategic investors including private equity firms
and domestic tech companies about joining a take-private deal,
said four people with direct knowledge of the matter.
Ctrip's move comes as U.S.-listed Chinese companies face
tightened scrutiny and more strict audit requirements from U.S.
regulators, while geopolitical tensions escalate between the
world's two largest economies. Those have prompted a number of
Chinese companies to abandon a New York listing and move instead
to an exchange closer to home.
Ctrip's delisting discussions, which have not been reported
previously, are at an early stage and are subject to change,
cautioned the sources, who spoke on condition of anonymity
because the matter is not public.
Ctrip, also known as Trip.com Group Ltd <TCOM.O>, declined to
comment.
Shares in Trip.com were up 11% in premarket trade on Tuesday.
There have been six announced take-privates of U.S.-listed
Chinese companies worth $9.1 billion so far this year, showed
Refinitiv data. The average premiums paid by buyers, however,
almost halved to 22% from 42% last year.
Just on Monday, China's Sogou Inc <SOGO.N> said shareholder
Tencent Holdings <0700.HK> made a preliminary offer to buy the
rest of the web search firm it did not already control, in a
deal that valued the company at about $3.5 billion.
Deals being discussed include a delisting of search engine giant
Baidu Inc <BIDU.O>, Reuters reported in May.
Both Ctrip and Baidu have held preliminary talks with Hong Kong
Exchanges and Clearing <0388.HK> about a possible secondary
listing, Reuters reported in January.
Ctrip later decided to delist as the coronavirus outbreak hit
its businesses badly in the first half and has weighed heavily
on its valuation, said one of the people.
It reported a 42% year-on-year drop in net revenue in the first
quarter of 2020 and a net loss of 5.4 billion yuan ($754
million). The company said it expected net revenue to decrease
by about 67% to 77% year-over-year for the second quarter of
2020 due to COVID-19's continued impact.
Its shares have fallen 17% so far this year while the Nasdaq
Golden Dragon China Index <.HXC>, which tracks Chinese firms
listed on the U.S. exchange, has gained 22% over the same
period.
Ctrip's diversified ownership structure, however, would present
a challenge to getting shareholders' backing for the delisting
plans. Its biggest shareholder Baidu only held a 11.7% stake,
followed by Scottish fund manager Baillie Gifford's 7.7%, as of
the end of last year, according to its 2019 annual report .
Its co-founders James Liang and Fan Min and other executives
owned a combined 5.9% stake, showed the report.
Founded in 1999, Ctrip went public on Nasdaq in 2003, as part of
an early wave of Chinese tech companies lured by high valuations
overseas.
(Reporting by Julie Zhu and Kane Wu in Hong Kong; Editing by
Muralikumar Anantharaman)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
