Qunar Will Not Be Stopped By The Price War
Thu, Jun. 23, 7:40 AM
- Qunar Cayman Islands Limited (NASDAQ:QUNR) has received a preliminary non-binding proposal from Ocean Management Limited to acquire all the outstanding shares of Qunar not owned by Significant Shareholders (who have majority voting power) for $30.39 pre ADS or $10.13 per ordinary share (one ADS = 3 ordinary shares).
- The buyer is an entity related to Ocean Imagination L.P., a private equity fund focused on investing in travel-related industries in China. The transaction will be funded with a combination of debt and equity capital.
- Recent SA articles: Pro & Con.
Jun. 1, 2015, 7:35 PM
- "On May 8, 2015, we received an unsolicited offer from Ctrip.com International (NASDAQ:CTRP), Ltd., or Ctrip, to acquire all of our outstanding shares," says Qunar (NASDAQ:QUNR) in its Q1 report. "After careful consideration of such offer, we declined to pursue it in a letter response dated June 1, 2015 ... we remain open to engaging in further discussions with Ctrip as well as with other strategic players in our sector."
- Bloomberg reported of Ctrip/Qunar merger talks back in 2014; antitrust approval of a deal could prove difficult, given the companies' combined Chinese online travel share. Since the time of Ctrip's offer, Ctrip has struck a deal to buy a 37.6% stake in smaller rival eLong, and has received a new $250M investment from Priceline.
- Also: Effective today, Qunar has terminated its Zhixin cooperation agreement with parent Baidu (NASDAQ:BIDU), through which Qunar ran an online travel marketplace for which Baidu promised to drive a guaranteed amount of traffic. SA author John Zhang has argued the deal was unfair to Qunar, noting (among other things) Baidu gets 76% of all Zhixin revenue beyond a "benchmark" level, and that Qunar has been paying Baidu huge sums for marketing services.
- Baidu has been given (and has exercised) warrants for 11.45M Qunar Class B shares (equal to 3.82M ADS, current value of $180M) for the traffic it drove. At the same time, Baidu is paying Qunar an RMB207M ($33.4M) termination fee.
- Meanwhile, Qunar has entered into a deal with Baidu (expires in May 2016, subject to renewal) through which "Baidu has agreed to grant Qunar an exclusive right to integrate hotel information and products into the PC and mobile app versions of Baidu Maps."
- On an RMB basis, Qunar is guiding for 105%-110% Y/Y Q2 revenue growth, a faster clip than Q1's 100%. The consensus is for 75.9% dollar-based growth.
- QUNR +2.3% AH to $47.05.
May 22, 2015, 9:09 AM
- Ctrip (NASDAQ:CTRP) has jumped to $76.00 (its 52-week high) in premarket trading following news it's part of an investor group that has bought a 62.4% stake in smaller/struggling rival eLong from Expedia, and that it's partnering with Expedia in "specified geographic markets." In a PR about the move, Ctrip states it spent $400M to buy a 37.6% stake.
- Archrival Qunar (NASDAQ:QUNR), whose shares were up 86% YTD going into today with the help of good earnings news, has fallen to $50.50.
- Ctrip's alliance with Expedia might not sit well with Priceline (NASDAQ:PCLN), which last year struck a deal to buy up to a 10% stake in Ctrip.
Apr. 28, 2014, 10:17 AM
- Sohu (SOHU -4.8%) missed Q1 estimates and provided light Q2 guidance. Meanwhile, as part of a recent crackdown, the Chinese government has pulled The Big Bang Theory and other popular U.S. shows from sites such as Sohu.com, Youku.com (YOKU -4.4%), Baidu's (BIDU -5%) iQiyi, and Tencent Video (TCEHY -2.8%). Time observes The Big Bang Theory has produced 1.3B video views since launching on Sohu TV in '09.
- The news is overshadowing a $1.22B investment in Youku by Alibaba (ABABA) and an affiliated P-E firm, and a WSJ report stating Alibaba is forming a mobile search JV with leading mobile browser firm UCWeb (once targeted by Baidu).
- The deals are the latest in a long line of investments and partnerships struck by Alibaba, Tencent, and Baidu, as each firm tries to build a Web/mobile empire covering over a dozen valuable markets.
- Is Qihoo (QIHU -0.8%) next in line to make a deal? With a $21.6B market cap, the security app/browser/search provider and Baidu rival is the biggest Chinese Internet company to remain independent of the big-3. Qihoo was reported in January to be talking with Alibaba.
- Other decliners: NQ -6.5%. VIPS -5.2%. WB -4.2%. WBAI -3%. LONG -4.5%. QUNR -2.4%.
Apr. 8, 2014, 9:37 AM
- Bloomberg reports leading Chinese travel sites Ctrip (CTRP +5.4%) and Qunar (QUNR +5.4%) are "discussing a range of possibilities, from a full-blown merger to a partnership."
- Sources caution the talks are at an early stage, and that ownership structure and financing haven't yet been agreed upon.
- With combined 2013 sales of more than $1B, a Ctrip-Qunar merger would create a Chinese online/mobile travel powerhouse ... provided regulators don't object. The companies have been aggressively battling for mobile customers, sacrificing margins in the process.
- Ctrip and Qunar are both rallying. Rival eLong (LONG +1.9%) is also higher amid positive early trading for recently-pressured Chinese Internet stocks.
- Baidu (BIDU +1.8%) owns 58.6% of Qunar, which delivered a strong IPO last year.
Qunar Cayman Islands Ltd. engages in the provision of travel and tourism services through an online commerce platform. It operates through the following segments: Hotel and Travel Agent Services; Advertising; and Group Sales. It offer pay-for-performance, display advertising, and online services... More
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