Internet group Tencent plans to provide $400m as the cornerstone investor for China-based local services platform and portfolio company Meituan Dianping’s initial public offering, Bloomberg reported today.
Meituan Dianping is currently assessing investor interest in the IPO, which will take place in Hong Kong and which is expected to raise about $4bn at a $50bn to $55bn valuation, according to people with knowledge of the matter.
Formed by the merger of food delivery platform Dianping and group buying service Meituan, the company operates a diversified local services portal with 310 million monthly active users that takes in areas such as food delivery, on-demand transport, event and cinema ticketing, travel and accommodation.
The IPO will follow a total of $9.9bn in equity funding. Tencent already owns a 20.1% stake in Meituan Dianping according to the IPO filing, having led a $4bn round for the company in October 2017 that included travel services provider Priceline, valuing it at $30bn.
Priceline holds 1.6% of Meituan Dianping and its other corporate backers include e-commerce group Alibaba (1.4%) and electronics producer Xiaomi (0.6%).
The company’s 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.
Goldman Sachs, Morgan Stanley and Bank of America are joint sponsors for the IPO and China Renaissance Holdings is financial adviser.