Baidu is selling about a third of its stake in online travel site Ctrip, generating around $1 billion to counter a slowing economy and intensifying competition in its key advertising business, according to a Bloomberg report.
Ctrip announced Thursday a proposed secondary offering of 31.3 million American depositary shares held by Baidu. That represents around 30% of Baidu's stake in Ctrip and is equivalent to around $1 billion according to Ctrip’s current share price.
Baidu will remain Ctrip’s largest shareholder. It owned a 19% stake in the company after exchanging its shares in Ctrip rival Qunar in 2015.
The proceeds will come in handy for the Beijing-based company. “Baidu may use the cash to meet its operational needs as its near-term sales falter amid macro-economic and competitive pressures,” Bloomberg Intelligence analysts Vey-Sern Ling and Tiffany Tam wrote in a research note on Thursday.
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