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Meituan Dianping 'to draw Tencent to US$4b-plus HK listing'

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Tencent Holdings, which now owns about a fifth of Meituan Dianping (above, one of its riders out on a delivery in Beijing), plans to buy US$400 million of stock in the IPO as a cornerstone investor.

Hong Kong

MEITUAN Dianping, the Chinese restaurant review and delivery giant, has started gauging investor demand for an initial public offering (IPO) in Hong Kong, people with knowledge of the matter said.

A stock offering from the company could raise more than US$4 billion, said a source, who asked to stay anonymous because the details are private.

Chinese social media giant Tencent Holdings Ltd, which already owns about a fifth of Meituan, plans to buy about US$400 million of stock in the IPO as a cornerstone investor, said different sources.

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The planned IPO would be only the second in Hong Kong with weighted voting rights since the city's bourse amended rules this year to attract more offerings from tech and biotech companies.

Smartphone giant Xiaomi Corp, the first to list with dual-class stock, has gained 0.6 per cent since it started trading in July, compared with a 0.1 per cent increase in the city's benchmark Hang Seng Index.

Meituan plans to seek a valuation of US$50 billion to US$55 billion, sources said previously.

Representatives for Tencent and Meituan declined to comment.

IFR Asia reported on Tuesday that the company is gauging investor interest, citing unidentified people.

Meituan is raising capital amid a costly battle for market share against some of China's biggest Internet companies as it ventures into new areas from ride-hailing and finance to travel. It posted a net loss of 19 billion yuan (US$2.8 billion) last year, hurt by ballooning marketing and research spending and after accounting for its preferred stock.

Goldman Sachs Group Inc, Morgan Stanley and Bank of America Corp are joint sponsors for the offering, while China Renaissance Holdings Ltd is the sole financial adviser, said its preliminary prospectus. BLOOMBERG