Tag Archives: Sources
HONG KONG/SHANGHAI (Reuters) – China’s Meituan-Dianping, an online food delivery-to-ticketing services platform, is bringing its sizable initial public offering (IPO) to Hong Kong, where it aims to raise over $ 4 billion, three people with knowledge of the deal said.
The firm filed plans late on Friday for the city’s second multibillion-dollar tech float this year after smartphone maker Xiaomi Corp’s blockbuster IPO of up to $ 6.1 billion. Meituan-Dianping is also – after Xiaomi – the latest company with a dual-class share structure to file for a Hong Kong listing, under the city’s new rules designed to attract tech companies.
The Beijing-based firm, backed by gaming and social media company Tencent Holdings Ltd (0700.HK), was valued at around $ 30 billion in a fundraising round last year.
It is aiming for a $ 60 billion valuation with the IPO, though industry insiders said it may have difficulty reaching that target as it is still money-losing and relies on a cash-burning business model to boost growth.
The firm is likely to list in October, said the people, who declined to be identified as the information was not public.
Meituan-Dianping did not detail the amount of funds targeted or a time frame. It declined to comment on its planned IPO when contacted by Reuters.
Founded in 2010 by serial entrepreneur Wang Xing, Meituan, likened to U.S. discounting platform Groupon Inc (GRPN.O), in 2015 completed a $ 15 billion merger with Dianping, akin to U.S. online review firm Yelp Inc (YELP.N). It offers a broad range of services including movie ticketing, food delivery, hotel and travel booking as well as ride-hailing.
Competitors include food-delivery platform Ele.me, backed by e-commerce firm Alibaba Group Holding Ltd (BABA.N), and leading ride-hailing firm Didi Chuxing, backed by Japan’s SoftBank Group Corp (9984.T).
In its draft prospectus, which gave investors the first detailed look at its financial health ahead of the IPO, the company disclosed a 19 billion yuan ($ 2.9 billion) loss for 2017, steeper than in the previous two years.
Its adjusted net loss – which excludes the impact of fair value changes of convertible redeemable preferred shares and other items – was 2.85 billion yuan, smaller than losses of 5.35 billion yuan in 2016 and 5.91 billion yuan in 2015, the prospectus showed.
Revenue rose to 33.9 billion yuan in fiscal 2017, sharply higher than the 12.99 billion yuan made in the prior year.
Meituan-Dianping’s other backers include venture capital firms Sequoia Capital and DST Global, Singapore sovereign wealth fund GIC Pte Ltd and state-owned investment company Temasek Holdings (Private) Ltd, as well as the Canada Pension Plan Investment Board.
Currently, Chief Executive Wang Xing owns 11.4 percent of the company, while Tencent owns 20.1 percent and Sequoia Capital 11.4 percent. Wang will remain controlling shareholder after the listing, the prospectus showed.
Being holders of Class A shares, Wang and two other co-founders, Mu Rongjun and Wang Huiwen, will be beneficiaries of a weighted voting rights structure, or dual-class shares, which give greater power to founding shareholders even with minority shareholding. Each Class A share has 10 votes while each Class B share has one vote.
Reporting by Adam Jourdan in Shanghai, Julie Zhu and Fiona Lau of IFR in Hong Kong, Aaron Saldanha in Bangalore, and Matthew Miller in BeijingEditing by Christopher Cushing and Edwina Gibbs
BEIJING/SHANGHAI (Reuters) – China is yet to approve U.S. chipmaker Qualcomm Inc’s (QCOM.O) proposed $ 44 billion acquisition of NXP Semiconductors (NXPI.O), three people close to the talks said, dismissing an earlier media report that said Beijing had already greenlit the deal.
Chinese clearance would remove a long-running roadblock to the deal that has become entangled with broader trade tensions between the United States and China. The acquisition has already got a nod from eight of the nine required global regulators, with China being the only hold-out.
Hong Kong-based South China Morning Post reported on Friday morning that China had given its go-ahead to the deal, citing people with knowledge of the matter, driving up shares of the U.S. firm in extended trade.
But Reuters sources, who are close to the Qualcomm-NXP deal, said they were not aware of any Chinese approval. One of them said planned U.S. tariffs on Chinese goods expected to be unveiled later in the day could impact the process.
Qualcomm did not have an immediate comment on Friday, while NXP did not respond to a request for comment.
China’s State Administration for Market Regulation, the regulator which reviews merger deals, did not immediately respond to a faxed request for comment.
Qualcomm met with regulators in Beijing last month in a bid to secure a clearance, but sources at the time said an approval would depend on the progress of broader bilateral talks and the U.S. government lifting a crippling supplier ban on telecoms equipment maker ZTE Corp (000063.SZ)(0763.HK).
Washington and Beijing have struck a deal to help ZTE back into business. However, trade talks remain in the balance with U.S. President Donald Trump expected to unveil “pretty significant” tariffs on Chinese goods on Friday.
Analysts said a Chinese approval would be significant as it would remove the last major barrier to the NXP deal, which is seen as key for Qualcomm to diversify its business and make a push into new areas like smart cars.
Qualcomm initially announced its bid for Dutch semiconductor company NXP in October 2016.
Reporting by Michael Martina and Matthew Miller in BEIJING, Adam Jourdan in SHANGHAI and Nikhil Subba in BENGALURU; Editing by James Dalgleish, Grant McCool and Himani Sarkar
BEIJING (Reuters) – Washington and Beijing are nearing a deal that would remove an existing U.S. order banning American firms from supplying Chinese telecommunications firm ZTE Corp, two people briefed on the talks told Reuters.
The people, who declined to be identified because the negotiations were confidential, also said the deal could include China removing tariffs on imported U.S. agricultural products, as well as buying more American farm goods.
ZTE, hit by a seven-year ban in April which effectively crippled its operations, would gain a major reprieve after the world’s two largest economies stepped back from the brink of a fully blown trade war following talks last week.
The company did not immediately reply to requests for comment.
White House advisors have said publicly that the ban against ZTE is being reexamined, but that the firm would still face “harsh” punishment, including enforced changes of management and at board level.
One person told Reuters there was a “handshake deal” on ZTE between U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He during talks in Washington last week that would remove the U.S. Commerce Department’s ban on American companies selling to ZTE in exchange for the purchase of more U.S. agricultural products.
The second person said China may also eliminate tariffs on U.S. agriculture products it assessed in response to U.S. steel duties as a part of the deal, and that ZTE could still be forced to replace its corporate leadership, among other penalties.
Both sources said the deal, while not yet cemented, was likely to be finalised before or during a planned trip by U.S. Commerce Secretary Wilbur Ross to Beijing next week to help finalize a broader trade agreement to avert a trade war.
The company, publicly traded but whose largest shareholder is a Chinese state-owned enterprise, had been hit with penalties for breaking a 2017 agreement after it was caught illegally shipping U.S. goods to Iran and North Korea, in an investigation dating to the Obama administration.
Reporting by Michael Martina; Additional reporting by Se Young Lee and Adam Jourdan; Editing by Muralikumar Anantharaman
NEW YORK/LONDON (Reuters) – Federal prosecutors in New York have been investigating since at least last year whether Chinese tech company Huawei Technologies Co Ltd [HWT.UL] violated U.S. sanctions in relation to Iran, according to sources familiar with situation.
The prosecutors have been investigating alleged shipping of U.S.-origin products to Iran and other countries in violation of U.S. export and sanctions laws, two of the sources said on condition of anonymity.
The probe, first reported by the Wall Street Journal on Wednesday, is being run out of the U.S. Attorney’s office in Brooklyn, the sources said. John Marzulli, a spokesman for the prosecutor’s office, would neither confirm nor deny the existence of the investigation.
The Department of Justice in Washington declined to comment.
Huawei, which makes handsets and telecommunications network equipment, said it complies with “all applicable laws and regulations where it operates, including the applicable export control and sanction laws and regulations of the UN, US and EU.”
News of the Justice Department probe follows a series of U.S. actions aimed at stopping or reducing access by Huawei and Chinese smartphone maker ZTE Corp (000063.SZ) to the U.S. economy amid allegations the companies could be using their technology to spy on Americans.
In February, Senator Richard Burr, the Republican chairman of the U.S. Senate Intelligence Committee, cited concerns about the spread of Chinese technologies in the United States, which he called “counterintelligence and information security risks that come prepackaged with the goods and services of certain overseas vendors.”
Republican Senators Marco Rubio and Tom Cotton have introduced legislation that would block the U.S. government from buying or leasing telecommunications equipment from Huawei or ZTE, citing concern the Chinese companies would use their access to spy on U.S. officials.
U.S. authorities last week banned American companies from selling to ZTE (000063.SZ) for seven years, saying the Chinese company had broken a settlement agreement related to Iran sanctions with repeated false statements – a move that threatens to cut off ZTE’s supply chain.
The ZTE ban was the result of its failure to comply with an agreement with the U.S. Commerce Department reached last year after it pleaded guilty in federal court to conspiring to violate U.S. sanctions by illegally shipping U.S. goods and technology to Iran.
In 2016, the Commerce Department made documents public that showed ZTE’s misconduct and also revealed how a second company, identified only as F7, had successfully evaded U.S. export controls.
In a 2016 letter to the Commerce Department, 10 U.S. lawmakers said they believed F7 to be Huawei, citing media reports.
In April 2017, lawmakers sent another letter to Commerce Secretary Wilbur Ross asking for F7 to be publicly identified and fully investigated.
Reporting by Arjun Panchadar in Bengaluru, Karen Freifeld in New York, Eric Auchard in London; Editing by Frances Kerry and Paul Simao
MILAN (Reuters) – Italian state lender CDP intends to buy shares in Telecom Italia (TIM) on the market or in block orders, a source told Reuters on Thursday.
CDP, which is controlled by Italy’s Treasury, does not currently hold any shares in TIM, the source, who is close to the matter, added.
The decision on the share acquisition, including its size, will be taken at CDP’s board meeting on Thursday.
Reporting by Stefano Bernabei, writing by Giulia Segreti; Editing by Kim Coghill
(Reuters) – Cloud storage company Dropbox Inc’s [DBX.O] initial public offering was oversubscribed, two people familiar with the matter said on Monday, indicating healthy demand for the first big tech IPO this year even as tech stocks opened the week on sour note.
While investor appetite looked encouraging with three days to go before final pricing, it was not clear if that would be strong enough to lift the deal above of the initial range of $ 16 to $ 18 a share that Dropbox set last week. The offering is expected to price Thursday, and the stock will start trading on the Nasdaq on Friday.
“It is early to predict the pricing. But what I can say is that from the conversations it seems the market is interested in it and IPO seems to be bright,” a separate source told Reuters. The three sources asked not to be named as the IPO pricing process was still underway.
Dropbox’s IPO comes in what is sizing up to be a challenging week for stocks, with the U.S. Federal Reserve set to raise interest rates on Wednesday, a day before the Dropbox deal is set to close.
Tech shares also fell hard to open the week, with Nasdaq down more than 2 percent on reports of Facebook Inc’s (FB.O) latest data privacy problems.
Dropbox’s IPO also comes on the heels of an upsized deal last week from cyber security firm Zscaler Inc (ZS.O) and is being watched as a barometer of investor enthusiasm for tech unicorns – young companies valued at more than $ 1 billion – after Snapchat owner Snap Inc’s (SNAP.N) shares cratered following a much-touted IPO a year ago.
Dropbox is selling 36 million shares, and the offering could be increased by 5.4 million if underwriters exercise their right to buy more stock. At the high end of the indicated pricing, it could raise nearly $ 650 million, making it the largest tech IPO since Snap hit the market just over a year ago.
The current price range suggests the San Francisco company, co-founded in 2007 by Andrew Houston and Arash Ferdowsi, will hit the public market valued at roughly $ 7 billion, a hefty discount to the $ 10 billion implied by its last funding round in 2014.
Reporting by Sweta Singh, Nikhil Subba and Diptendu Lahiri in Bengaluru, Editing by Dan Burns and Saumyadeb Chakrabarty
SAO PAULO (Reuters) – Amazon.com Inc (AMZN.O) is looking to lease a 50,000-square-meter warehouse just outside Sao Paulo, people familiar with the matter told Reuters, as it steps up its push into Latin America’s biggest retail market, Brazil.
The logistics investment, which would be four times the size of its current book-shipping operation in the country, is a sign the online retailer may soon handle distribution of electronics and other goods sold on its Brazilian website.
That would be the first step of its kind for Amazon in Latin America’s largest economy, where it currently relies on third parties to ship their own goods sold on its marketplace, and it underscores the seriousness of the e-commerce giant’s renewed push into Brazil.
Amazon declined to comment to questions about leasing a warehouse.
While an estimated two-thirds of Brazil’s 209 million people have internet access, online retail was slow to take off at first, amid concerns over security and complications with tax and logistics in the continent-sized country.
E-commerce accounts for around 5 percent of Brazil’s roughly $ 300 billion retail market — about half its share in the United States — but it has doubled in the past four years and is forecast to keep growing annually at a double-digit pace.
Now Amazon, which expanded its Brazil business from books to electronics in October, is gearing up to fight rivals such as Latin Ameria’s homegrown e-commerce champion Mercado Libre Inc (MELI.O) and B2w Cia Digital, (BTOW3.SA) which is indirectly controlled by partners of private equity group 3G Capital.
“You obviously can’t underestimate a company like Amazon,” said Pedro Guasti, CEO of Brazilian online consultancy Ebit. “It has huge capacity to invest and it’s obviously taking a bigger bite of the cake than it did last year.”
Mercado Libre Inc, B2w and local retailer Magazine Luiza SA (MGLU3.SA) have stolen a march on Amazon by storing and shipping goods appearing on their websites even when offered by third-party sellers, to ensure speed and customer satisfaction.
Amazon, by contrast, has been slow to tackle the challenges of shipping in a country where tricky logistics and tax issues have long made online retail an unprofitable venture.
In Mexico, Amazon launched its third-party marketplace coupled with its own shipping service, called “Fulfillment by Amazon,” in 2015.
The contrast has been stark. Nearly 20 percent of reviews on Amazon’s Brazilian marketplace are negative, compared with 10 percent in Mexico and just 4 percent in the United States, according to e-commerce analytics firm Marketplace Pulse.
Complaints in Brazil often focus on delayed or canceled orders – a problem dramatically reduced in other countries when Amazon itself packs and posts orders of third-party goods stored at its warehouse facilities.
In an early sign of Amazon’s Brazilian logistics push, the company posted more than a dozen listings for distribution jobs in the country to LinkedIn last year, including “Site leader, Fulfillment Center”.
The new warehouse site outside of Sao Paulo, in the municipality of Cajamar, looks to be a step in that direction.
There San Francisco-based logistics company Prologis Inc (PLD.N) has offered a 50,000-square-meter space to Amazon in a new industrial park that hosts DHL and Samsung, according to sources, who said adaptation of the warehouse had not begun.
Prologis, which also partnered with Amazon on a mega-warehouse north of Mexico city last year, declined to comment.
The preparations in Brazil come as Luft, the local logistics operator for Amazon’s book business, readies a move into another Prologis site nearby in Cajamar, sources said, leaving its current 12,000-square-meter facility in the city of Barueri.
Amazon registered in October to conduct operations in Cajamar, according to municipal records seen by Reuters.
The new logistics investment could spell trouble for rivals.
Mercado Libre has been a success story among Latin America tech start ups: its shares have nearly tripled since 2014, bringing its market capitalization to more than $ 15 billion.
Magazine Luiza’s stock has risen sixfold in each of the past two years as it shifted its rolled out an ambitious e-commerce strategy built on its brick and mortar stores.
Reporting by Gabriela Mello; Writing and additional reporting by Brad Haynes; Editing by Daniel Flynn and Alistair Bell
HONG KONG (Reuters) – China’s Ant Financial Services Group is planning to raise up to $ 5 billion in fresh equity that could value the online payments giant at more than $ 100 billion, people familiar with the move told Reuters.
A fundraising would bring Ant, in which e-commerce firm Alibaba Group Holding Ltd is taking a one-third stake, a step closer to a hotly anticipated initial public offering by establishing a more current valuation.
Ant’s last fundraising in 2016 valued the owner of Alipay, China’s top online payment platform, at about $ 60 billion. The new round should start with a valuation of between $ 80 billion to $ 100 billion, the people said.
Ant is currently in talks to appoint advisers for the fundraising which is expected to be launched in the next couple of months, they added.
Ant declined to comment on its fundraising plans. All the people spoke to Reuters on the condition they not be identified due to the sensitivity of the issue.
While no timetable for an IPO has been set, nor any location yet chosen, Ant’s plans are being viewed as a pre-IPO fundraising, the people said. A pre-IPO round is an increasingly common move by sought-after Chinese companies to establish valuations and widen their investor base ahead of going public.
It was not immediately clear how the company plans to use the fresh cash.
The exact timing and size of the fundraising still depends on investor feedback but any deal will add to an already hectic pace of domestic and offshore fundraising by Chinese tech firms that are looking to expand both at home and abroad.
Chinese e-commerce firm JD.com is raising funds for its logistics unit with a target of attracting at least $ 2 billion, while live-video streaming start-up Kuaishou is nearing the close of a $ 1 billion funding round, sources have said.
Ant’s own existing investments include stakes in Paytm, the Indian mobile payment and e-commerce website, and Thai financial technology firm Ascend Money.
Last month, however, Ant suffered a setback when a U.S. government panel rejected its $ 1.2 billion offer for money transfer company MoneyGram International over security concerns.
At home, in addition to its core online payments business, which Ant says has 520 million yearly users, the company also offers wealth management, credit scoring, micro lending and insurance services.
Last week, Alibaba announced it would take a 33 percent stake in Ant – replacing the current system where Alibaba receives 37.5 percent of Ant’s pre-tax profit – in what was viewed as an important step ahead of any IPO.
Alibaba set up Alipay in 2004, modeling the business on PayPal, to help Chinese buyers shop online, and later controversially spun it off ahead of its own listing in 2014. Jack Ma, Alibaba’s founder, controls Ant, according to Alibaba filings with the U.S Securities and Exchange Commission.
Ant is considered by some analysts as one of the most valuable Alibaba assets due to its unique position in Chinese e-commerce.
Current shareholders in Ant include large state-owned institutions such as China Life Insurance, China Post Group – parent of Postal Savings Bank of China – and a unit of China Development Bank.
Reporting by Sumeet Chatterjee and Julie Zhu; Additional reporting by Kane Wu; Editing by Muralikumar Anantharaman and Edwina Gibbs
HONG KONG (Reuters) – Tencent Holdings Ltd is leading a deal to invest 10 billion yuan ($ 1.59 billion) in Chinese menswear group Heilan Home Co Ltd, upping a retail rivalry with fellow internet giant Alibaba Group Holding Ltd, sources with knowledge of the matter said.
China’s second-largest e-commerce company JD.com Inc and online clothing platform Vipshop Holdings Ltd will also be among the group that plans to acquire less than 10 percent of the company for 5 billion yuan, one source said.
Another 5 billion yuan would help set up an industrial investment fund to focus on deals that fit with Heilan’s business, the person said, requesting anonymity because they were not authorized to speak to the media.
Heilan had a market value of about $ 8.13 billion as of Monday, when it halted shares from trading, pending deal announcements.
Tencent, JD.com and Vipshop declined to comment. A Heilan spokesman was not immediately available to comment.
The proposed deal, which could be announced as early as Friday, extends a recent push by Tencent, China’s biggest social network and gaming company, into bricks-and-mortar retail to further compete with Alibaba.
Heilan which has clothing brands such as HLA and SANCANAL, has been a long-time partner of Alibaba’s online marketplace Tmall.
But last month Tencent, which has a market capitalization of $ 563 billion, said it would invest 4.2 billion yuan for a stake in Yonghui Superstores. It is also looking to take a stake in the China business of French supermarket retailer Carrefour.
The recent moves reflect a wider, long-running stand-off between Tencent and Alibaba, which have made competing investments in areas as diverse as bike-sharing apps, food delivery and gaming.
JD.com, in which Tencent is a top-10 investor, traditionally leads against Alibaba in online retail sales of electronics and home appliance products, but lags behind in the fashion business.
Tencent and JD.com last month jointly made an $ 863 million investment in Vipshop, in a bid to tap the country’s young female shoppers and gain access to consumer and transaction data to help them compete with Alibaba’s online payment platform Alipay.
Jiangsu-based Heilan was set up by Zhou Jianping, one of the richest people in China’s fashion industry, in 1997. It runs more than 5,000 stores, mostly in China, and recorded 12.5 billion yuan in operating income in the first three quarters last year, its website showed.
Reporting by Julie Zhu; Editing by Stephen Coates
SINGAPORE (Reuters) – Alphabet Inc’s Google (GOOGL.O), Singapore state investor Temasek Holdings Pte Ltd and Chinese online platform Meituan-Dianping are investing in a fundraising round of Indonesian ride-hailing start-up Go-Jek, sources familiar with the matter said.
Go-Jek’s existing investors such as global private equity firms KKR & Co LP (KKR.N) and Warburg Pincus LLC are also participating in the funding round of Go-Jek, which is raising about $ 1.2 billion in total, the sources said.
Google, KKR, Warburg and Temasek [TEM.UL] declined to comment. Meituan-Dianping and Go-Jek did not immediately respond to requests for comment. The people declined to be identified as they were not authorized to speak to the media.
Reporting by Anshuman Daga; Additional reporting by Julie Zhu in HONG KONG; Editing by Muralikumar Anantharaman