China’s Meituan-Dianping chooses three Wall Street banks for HK IPO

REUTERS/Thomas White/Illustration

China’s largest provider of on-demand online services, Meituan-Dianping, has tapped Bank of America Merrill Lynch (BAML), Goldman Sachs Group Inc and Morgan Stanley to work on a Hong Kong float that could see it list as early as later this year, five people with knowledge of the move said.

Meituan-Dianping, an online platform for ordering food and booking movies and restaurants, has recently started preparatory work, aided by the three Wall Street banks, for the initial public offering (IPO), the people told Reuters.

No formal mandate to investment banks for managing the IPO has been awarded yet, they said.

The company, formed in 2015 from the $15 billion merger of Groupon-like Meituan and Yelp-like Dianping, is looking to benefit from the bull run in technology stocks, said three of the people.

The Hong Kong-listed shares of existing investor Tencent Holdings Ltd, for instance, have risen about 90 percent over the past year, outpacing a 51 percent rise in the benchmark Hang Seng Index.

In October, Meituan-Dianping was valued at $30 billion following a $4 billion funding round led by Tencent. The people said it was too early to determine an IPO valuation as discussions are still at a preliminary stage.

Beijing-based Meituan-Dianping, BAML, Goldman and Morgan Stanley declined to comment. All the people declined to be identified as discussions related to the IPO are confidential.

Reuters reported in November that Meituan-Dianping, which offers a broad range of services including travel packages, was considering an IPO in the United States as soon as this year.

The company has however shifted focus to Hong Kong, the people said, as the city’s exchange operator is about to allow dual-class shares, which potentially allow founders to weight share voting rights in their favor.

Led by serial entrepreneur Wang Xing, Meituan-Dianping’s backers also include Sequoia Capital Ltd, Singaporean state investors GIC Pte Ltd [GIC.UL] and Temasek Holdings (Pte) Ltd [TEM.UL], as well as DST Global and the Canada Pension Plan Investment Board.

The IPO proceeds could help boost the firm’s firepower for investments in offline retail and artificial intelligence, said one of the people, pitching it against China’s leading e-commerce players including Alibaba Group Holding Ltd and JD.com Inc.

Meituan-Dianping last month said it had about 320 million active buyers and more than 4 million merchants with total revenue reaching $5.4 billion last year. It did not disclose details about profitability.

The $30 billion valuation ranked the firm as the world’s fourth-largest “unicorn” – technology start-ups valued at $1 billion or more – according to data and analytics provider CB Insights.

Also Read:

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Meituan Dianping seeks Hong Kong IPO with a valuation of at least $60b

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.