Chinese travel site Qunar joins the delisting bandwagon
Unclear where the online travel platform meaning “where to” in Chinese is going to after privatisation offer from a company owned by 7 Days Inn Hotel owner
China’s second-largest online travel platform Qunar is the latest US-listed Chinese company to go private, in a wave of such firms’ returning to the home market for higher valuations.
Nasdaq-listed Qunar Cayman Islands said in a regulatory filing on Thursday that it has received a non-binding offer from Ocean Management to buy all its outstanding shares at a price that is a 15 per cent premium to the closing price of its American depositary receipts on June 22. Ocean Management is an entity related to Ocean Imagination, a private equity fund focused on investing in travel related industries in China, according to the announcement.
The move comes close on the heels of eLong, another US-listed Chinese online travel agency that is also controlled by the sector’s biggest player Ctrip, completing a 10-month long privatisation process on May 31.
According to US exchange filings, Zheng Nanyan, founder of 7 Days Inn hotel chain and a former Ctrip executive, is the sole director and owner of Ocean Imagination, which invested in the eLong buyout.
Industry insiders say it is likely that Ctrip is behind the buyout bid for Qunar, in which it owns 45 per cent of the aggregate voting rights following a share-swap deal with search giant Baidu, which owns 25 per cent.
Ctrip and Qunar together dominate China’s online flight and hotel booking markets, making a direct acquisition potentially troublesome for antitrust regulators. The online travel agency market in China has boomed with the country’s rapidly-growing aviation market, but cutthroat competition has driven margins down significantly in recent years, leading to an ongoing consolidation.
