China's Meituan Dianping sets HK IPO valuation at up to $55 billion: sources

SINGAPORE/HONG KONG (Reuters/IFR) – China’s Meituan Dianping, an online food delivery-to-ticketing services platform, has set an indicative price range of HK$60 to HK$72 ($7.64-$9.17) per share for its initial public offering (IPO) in Hong Kong, valuing itself at up to $55 billion, three people with direct knowledge of the matter said. Meituan, already one of China’s most valuable internet firms, could raise as much as $4 billion before the exercise of a “greenshoe” or over-allotment option, whereby additional shares are sold depending on demand.

Visitors look at a Meituan Autonomous Delivery (MAD) vehicle of Chinese food delivery platform Meituan-Dianping, at the first Smart China Expo in Chongqing, China August 23, 2018. Picture taken August 23, 2018. REUTERS/Stringer

The company is discussing a valuation of $46 billion to $55 billion with potential cornerstone investors including its main backer, gaming and social media company Tencent Holdings Ltd, for its float, the people said.

Meituan plans to secure about $1.5 billion from the cornerstone investors in the IPO, they added.

Meituan declined to comment when reached by Reuters. Tencent did not immediately respond to a request for comment outside regular business hours.

The Beijing-based firm filed plans for the city’s second multibillion-dollar tech float this year after smartphone maker Xiaomi Corp’s blockbuster IPO of nearly $5 billion.

Meituan is also – after Xiaomi – the latest company with a dual-class share structure to file for a Hong Kong listing, under the city’s new rules designed to attract tech companies.

However in late July Hong Kong Exchanges and Clearing (HKEX), the operator of Hong Kong exchange, said it would delay changes that would allow companies to hold shares with more voting rights, as more time was needed for investors to become accustomed to recent rule changes.

Meituan was valued at around $30 billion in a fundraising round late last year.

Xiaomi started trading in July after a closely watched but disappointing initial public offering that valued it at almost half the $100 billion that industry analysts had initially estimated.

Reporting by Julie Zhu in SINGAPORE, and FIONA LAU of IFR in HONG KONG; Writing by Anshuman Daga; Editing by Susan Fenton and Adrian Croft