Tongcheng-Elong Holdings, a Chinese travel company backed by Tencent and Ctrip, is planning an initial public offering in Hong Kong in the second half of this year, according to a Wall Street Journal report. The company could raise between USD 1 billion and USD 1.5 billion in its share sale.
Tongcheng Network, a subsidiary of Tongcheng Tourism (LY.com), and eLong announced last December to merge and form a new entity named TongCheng-ELong, integrating mobility and hotel resources to build a leading travel service platform. Tongcheng covers air tickets, hotels and ground transport bookings, while eLong focuses on hotel business.
Tencent and Ctrip will become major shareholders of the new entity after the merger, and other shareholders including Wanda and Ctrip-backed OceanLink also support this move.
The WSJ report also mentioned that many Chinese companies backed by Tencent have either gone public recently or are planning IPOs this year, benefiting from strong investor interest in part because of Tencent’s strong growth.
Elong’s financing history
May 2011 - Tencent acquired 16% of Elong for USD 84.4 million, while Expedia acquired 8% for USD 41.2 million to boost its holdings to 56%.
May 2015 - Expedia sold its controlling stake in Elong to Ctrip, Plateno Group and other players for about USD 671 million, after which Ctrip became Elong’s biggest shareholder with 37.6% holdings, while Plateno held 22.3% and Luxuriant Holdings Limited 3.72%.
August 2015 - Tencent offered to take Elong private at USD 18 per share, hoping to collect all Elong stocks in the market not held by Ctrip, Plateno and Tencent itself.
June 2016 - Elong announced its merger with E-dragon Mergersub to go private, and then delisted from Nasdaq.
Tongcheng’s financing history
February 2014 - Tongcheng secured a total of RMB 500 million from Tencent, Boyu Capital and Oriza Holdings. The founding team of Tongcheng retained full control of the company after the funding and aimed for an independent IPO.
April 28 - Ctrip splashed out USD 200 million to acquire a minority stake in Tongcheng and agreed to provide hotel booking services for the site.
July 2015 - Dalian Wanda spent RMB 3.58 billion as the lead investor in a Tongcheng financing round, Tongcheng raised more than RMB 6 billion in total in the round, also backed by Tencent Industrial Capital, CITIC Capital and other institutional investors.
October 2016 - Wanda, Ctrip and Tencent Industrial Capital together invested RMB 1 billion in Tongcheng.
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