Tongcheng-eLong, a China-based online travel agency backed by corporates Tencent, Ctrip and Dalian Wanda, is seeking $1bn in its initial public offering, China Money Network reported today, citing local media reports.
The company filed its IPO prospectus in June this year, but so far has not officially confirmed any financial terms. It is expected to go public in Hong Kong in December and has scheduled a hearing with the listing authorities this week.
Tongcheng-eLong is the result of a merger between LY.com, the online travel services provider also known as Tongcheng Network, and online travel agency eLong that was agreed in December 2017 and completed in March this year.
The company runs an online platform that enables customers to book hotel accommodation, plane and train tickets. It had 121 million monthly active users as of 2017, according to the prospectus.
LY.com most recently raised RMB2bn ($312m) from investment firm OCT Group in April 2018. It had acquired Wanda Tourism, the online travel subsidiary of conglomerate Dalian Wanda, in 2016, and concurrently secured $149m in funding from Wanda, online travel services provider Ctrip and internet company Tencent.
Dalian Wanda had already led a $966m funding round for LY.com in 2015, with participation from 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 supplied $82m in funding.
ELong floated on Nasdaq in 1999. Tencent purchased $84.4m worth of shares in the company in 2011, when travel booking site Expedia increased its stake to a majority shareholding of 56%.
Expedia later sold its shares to investors including Ctrip in a 2015 deal that made Ctrip eLong’s single biggest investor. ELong merged with shell company E-dragon Mergersub and delisted from Nasdaq the following year.
Proceeds from the initial public offering will be used to fund the development of additional products and services, strengthen Tongcheng-eLong’s big data and artificial intelligence capabilities, hire additional engineers and support potential acquisitions.
Tencent and Ctrip own stakes in Tongcheng-eLong sized at 24.9% and 22.9% respectively, according to the prospectus, followed by Huafan Runhe (8.7%), City Legend International (5,6%) and Ocean General Partners (5.2%).
Morgan Stanley, JP Morgan and CMB International have been appointed as underwriters for the proposed offering.
