Meituan Dianping, a China-based local services platform backed by internet group Tencent, has set its price range at $7.64 to $9.17 for its initial public offering, Reuters reported on Friday.
The company is hoping to raise up to $4bn at a valuation of $46bn to $55bn. It is in discussions with five cornerstone investors to secure a total of $1.5bn – including $400m from Tencent revealed earlier last week and $100m from conglomerate China Chengtong Holdings.
The remaining three investors are reported to be asset manager OppenheimerFunds with a $500m commitment as well as hedge funds Lansdowne Partners ($300m) and Darsana Master Fund ($200m).
Meituan Dianping was created through a merger of food delivery platform Dianping and group buying service Meituan in 2015, and has grown to a diversified local services portal with operations covering food delivery, on-demand transport, ticketing, travel and accommodation.
Proceeds are set to go towards the further development of Meituan Dianping’s technology, the creation of new services and products, and strategic acquisitions.
Meituan Dianping has filed to list in Hong Kong, but faced a setback when operator Hong Kong Exchanges and Clearing decided in July to delay regulatory changes to allow companies to hold shares with more voting rights in order to give investors time to adjust to the new rules.
The company has raised $9.9bn in equity funding to date. Tencent currently holds a 20.1% stake, having led a $4bn funding round in October 2017 that featured travel services provider Priceline and valued the business at $30bn.
Priceline owns 1.6% of Meituan Dianping, while e-commerce group Alibaba holds 1.4% and electronics producer Xiaomi has a 0.6% stake.
Shareholders also include Sequoia Capital (11.4%), Trustbridge Partners (3.6%), Coatue Management (3.2%), Tiger Global Management and Hillhouse Capital (3.1% each), DST Global (2.7%), Capital Today (2.4%), GIC (1.8%), Canada Pension Plan Investment Board, IDG Capital and China-UAE Investment Cooperation Fund.
Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley are sponsors for the offering, while China Renaissance is the financial adviser.