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 Ctrip.com, 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.