Sunday 20 October 2019

Baidu to sell almost third of Ctrip stake for $1 billion

Baidu ( 百度 ) is a large Chinese multinational technology company specializing in Internet-related services and products and artificial intelligence.

Ctrip ( 携程 ) is a Chinese provider of travel services including accommodation reservation, transportation ticketing, packaged tours and corporate travel management.

Baidu will sell nearly a third of its stake in online travel firm, expecting to raise about $1 billion as it looks to invest in new revenue streams.

Baidu, Ctrip’s biggest shareholder with a 19% stake, is offering 31.3 million American Depositary Shares (ADS), each representing 0.125 ordinary share of Ctrip. Underwriters will have a Greenshoe option of 4.7 million ADS, Ctrip said in a statement.

What is a Greenshoe Option? A greenshoe option is an over-allotment option. In the context of an IPO, it is a provision in an underwriting agreement that grants the underwriter the right to sell investors more shares than initially planned by the issuer if the demand for a security issue proves higher than expected.

Most of Baidu success so far has been at video streaming service iQiyi which competes with Alibaba-backed Youku and Tencent Holdings’ Tencent Video.

Recently Baidu invested in science forum Guoke, and Zhihu, China’s answer to Quora.

1 comment:

  1. $1 billion dollars - what a huge dollar amount. Baidu wants to focus on businesses other than Ctrip.