Tongcheng-eLong, a China-based online travel agency backed by corporates Tencent, Ctrip and Dalian Wanda, has raised $180m in an initial public offering on the Hong Kong Stock Exchange.
The company issued approximately 143 million shares priced at HK$9.80 ($1.25) a piece, near the bottom of the IPO’s HK$9.75 to HK$12.65 range. Reports last month suggested it was targeting $1bn, but that goal was reduced to $233m earlier this month.
Tongcheng-eLong was created through the merger of LY.com, an online travel services provider also known as Tongcheng Network, and online travel agency eLong. The deal was agreed in December 2017 and closed in March this year.
The company’s online platform allows consumers to book hotel accommodation, plane and train tickets. It had more than 160 million monthly active users in the first half of 2018, according to the prospectus.
LY.com received $312m from investment firm OCT Group in April this year. It purchased Wanda Tourism, the online travel unit of conglomerate Dalian Wanda, in 2016, and concurrently raised $149m from Wanda, online travel services provider Ctrip and internet company Tencent.
Dalian Wanda led a $966m funding round for LY.com in 2015 that also featured Tencent and fund manager Citic Capital. Ctrip injected $200m into the company in April 2014, two months after Tencent, Boyu Capital and Oriza Holdings had invested $82m.
ELong listed on Nasdaq in 1999. Tencent acquired $84.4m worth of shares in the company in 2011, when travel booking site Expedia boosted its shareholding to a majority stake of 56%.
Expedia went on to sell its stake to investors including Ctrip in a 2015 deal that turned Ctrip into eLong’s single biggest shareholder. ELong then merged with shell company E-dragon Mergersub and delisted from Nasdaq in 2016.
Proceeds from the initial public offering will go toward product and services development, help the company to expand its big data and artificial intelligence capabilities, drive recruitment and support potential acquisitions.
Tencent and Ctrip owned stakes of 24.9% and 22.9% respectively ahead of the offering, which have been reduced to 23.1% and 22.6%, followed by Huafan Runhe (8.1% down from 8.7%). The underwriters for the IPO are Morgan Stanley, JP Morgan and CMB International.
