Meituan Dianping Is Said to Draw Tencent to $4 Billion-Plus IPO

(Bloomberg) -- Meituan Dianping, the Chinese restaurant review and delivery giant, has started gauging investor demand for a planned Hong Kong initial public offering, people with knowledge of the matter said.

A stock offering from the company could raise more than $4 billion, said one of the people, who asked not to be identified because the details are private. Chinese social media giant Tencent Holdings Ltd., which already owns about a fifth of Meituan, plans to buy about $400 million of stock in the IPO as a cornerstone investor, according to different people familiar with the matter.

The planned IPO would be only the second in Hong Kong with weighted voting rights since the city’s bourse amended rules this year to attract more offerings from tech and biotech companies. Smartphone giant Xiaomi Corp., the first to list with dual-class stock, has gained 0.6 percent since it started trading in July, compared with a 0.1 percent increase in the city’s benchmark Hang Seng Index.

Meituan plans to seek a valuation of $50 billion to $55 billion, people familiar with the matter said previously. Representatives for Tencent and Meituan declined to comment. IFR Asia reported earlier Tuesday that the company started gauging investor interest, citing unidentified people.

Meituan is raising capital amid a costly battle for market share against some of China’s biggest internet companies as it ventures into new areas from ride-hailing and finance to travel. It posted a net loss of 19 billion yuan ($2.8 billion) last year, hurt by ballooning marketing and research spending and after accounting for its preferred stock.

Goldman Sachs Group Inc., Morgan Stanley and Bank of America Corp. are joint sponsors for the offering, while China Renaissance Holdings Ltd. is sole financial adviser, according to a preliminary prospectus.

©2018 Bloomberg L.P.