Advertisement
China technology
BusinessBanking & Finance

Food-deliverer Meituan raises US$10 billion as its follow-on stock sale fetches top price amid ravenous appetite for Chinese tech deals

  • Food delivery giant prices US$6.6 billion share placement at top-end of the marketing range
  • Convertible bond tranches both priced at a conversion premium of 57.5 per cent

Reading Time:4 minutes
Why you can trust SCMP
A delivery courier for Meituan travels along a road in Shanghai. Photo: Bloomberg
Alison Tudor-Ackroyd

Meituan, China’s dominant food delivery platform, raised almost US$10 billion of additional funds overnight to finance its push into using autonomous vehicles and aerial drones in its operations.

Advertisement

The Beijing-based company raised US$6.588 billion by selling additional shares at HK$273.25 (US$35.25) each, and sold about US$3 billion of convertible bonds. The top-up shares placement, equivalent to 3.2 per cent of the company’s equity, was made at the top end of a marketing range of between HK$265 and HK$274 per share, according to a terms sheet seen by South China Morning Post.

Meituan’s shares and convertible bonds were multiple times oversubscribed, allowing the 10-year-old company to comfortably raise additional capital even as the entire internet and technology industry is placed under intense scrutiny by antitrust regulators for market dominance and corporate behaviour that potentially squeeze out fair competition. A Meituan subsidiary was fined 1.5 million yuan last month for breaching China’s price laws.
Meituan’s blockbuster deal, coming close on the heels of the US$15 billion divestment two weeks ago by Tencent Holdings’ biggest shareholder Prosus, underscores the appetite for Chinese technology shares, buoyed by what a person familiar with Meituan’s stock sale described as “a tsunami of deals and a wall of money coming out of China.”
Food delivery couriers for Meituan stand with insulated bags during a morning briefing on a street in Shanghai. Photo: Bloomberg
Food delivery couriers for Meituan stand with insulated bags during a morning briefing on a street in Shanghai. Photo: Bloomberg

Interest in the equity and bond offerings were so intense that the whole order book was filled by 5.30pm on Monday, overbought by 10.15pm and closed by 10.45pm. Banks orchestrating the deal created momentum in the book from the get-go by wall-crossing a small group of large institutions who were likely to participate, according to people familiar with the matter.

Advertisement