Meituan-Dianping files for the Hong Kong IPO; aims to raise more than $ 4 billion

HONG KONG / SHANGHAI (Reuters) – China's Meituan-Dianping, an online food delivery delivery platform, is launching its initial public offering (IPO) in Hong Kong, which aims to raise more than $ 4 billion of dollars. the knowledge of the case said.

The firm filed plans Friday night for the city's second multi-billion-tech technology float, following the IPO of Xiaomi Corp, maker of smart phones, amounting to up to 39 percent. to $ 6.1 billion. Meituan-Dianping is also – after Xiaomi – the last company to have a two-class stock structure to deposit in Hong Kong, according to the city's new rules to attract technology companies.

The Beijing-based company, backed by gaming and social media company Tencent Holdings Ltd (0700.HK), was valued at about $ 30 billion during a fundraiser last year.

It is aiming for a $ 60 billion valuation with the IPO, although industry insiders have said it might have difficulty reaching this goal as it is still losing money. Money and supports an economic model to stimulate growth.

The company is likely to register in October, said the people, who refused to be identified that the information was not public.

Meituan-Dianping has not detailed the amount of targeted funds or a deadline. He declined to comment on his planned IPO when contacted by Reuters.

Founded in 2010 by serial entrepreneur Wang Xing, Meituan, likened to the US Groupon Inc. discount platform (GRPN.O), concluded in 2015 a $ 15 billion merger with Dianping, which is similar to the American online magazine company Yelp Inc (YELP.N). It offers a wide range of services, including movie ticketing, food delivery, hotel and travel booking as well as carpooling.

Competitors include the Ele.me food delivery platform, supported by Alibaba Group Holding Ltd (BABA.N), and Didi Chuxing, leader in the ride market, supported by SoftBank Group Corp. (9984.T).

In its draft prospectus, which gave investors the first comprehensive insight into its financial health prior to the IPO, the company announced a loss of 19 billion yuan ($ 2.9 billion) in 2017, plus pronounced than the two previous years.

Its adjusted net loss – which excludes the impact of fair value changes in convertible convertible preference shares and other items – was 2.85 billion yuan, down from 5.35 billion yuan in 2016 and 5.91 billion yuan in 2015, according to the prospectus.

The business turnover reached 33.9 billion yuan in 2017, up sharply from 12.99 billion yuan the year before.

Other donors to Meituan-Dianping include venture capital firms Sequoia Capital and DST Global, Singapore's GIC Pte Ltd sovereign wealth fund and Temasek Holdings (Private) Ltd, a public investment company, as well as 39: Canada Pension Plan Investment Board.

Currently, Managing Director Wang Xing holds 11.4% of the company, while Tencent holds 20.1% and Sequoia Capital 11.4%. Wang will remain controlling shareholder after listing, the prospectus showed.

Class A shareholdings, Wang and two other co-founders, Mu Rongjun and Wang Huiwen, will benefit from a weighted structure of voting rights, or two-class shares, conferring more than power to founding shareholders even with a minority stake. Each Class A Share has 10 votes while each Class B Share has one vote.

The company has mandated Bank of America Merrill Lynch, Goldman Sachs Group Inc. (GS.N) and Morgan Stanley (MS.N) to jointly sponsor his IPO. China Renaissance is the financial advisor.