HONG KONG • Chinese online travel giant Ctrip is in talks with potential investors about funding its delisting from Nasdaq because of rising United States-China tensions and the coronavirus-driven hit to its business, sources told Reuters.
The management of China’s largest online travel firm, with a current market value of US$16.5 billion (S$22.8 billion), has reached out to a number of financial and strategic investors, including private equity firms and domestic tech companies, about joining a take-private deal, said four people with direct knowledge of the matter.
Ctrip’s move comes as US-listed Chinese companies face tightened scrutiny and stricter audit requirements from US regulators, while geopolitical tensions escalate between the world’s two largest economies. Those have prompted a number of Chinese companies to abandon a New York listing and move instead to an exchange closer to home.
Ctrip’s delisting discussions, which have not been reported previously, are at an early stage and are subject to change, cautioned the sources, who spoke on condition of anonymity because the matter is not public.
Ctrip, also known as Trip.com Group, declined to comment.
There have been six announced take-private deals for US-listed Chinese firms worth US$9.1 billion so far this year, Refinitiv data showed. The average premiums paid by buyers, however, almost halved to 22 per cent from 42 per cent last year.
Deals being discussed include a delisting of search engine giant Baidu, Reuters reported in May.
Both Ctrip and Baidu have held preliminary talks with Hong Kong Exchanges and Clearing about a possible secondary listing, Reuters reported in January.
Ctrip later decided to delist as the coronavirus outbreak hit its businesses badly in the first half and has weighed heavily on its valuation, said one of the sources.
It reported a 42 per cent year-on-year drop in net revenue in the first quarter of this year and a net loss of 5.4 billion yuan (S$1.06 billion).
Its shares have fallen 17 per cent so far this year while the Nasdaq Golden Dragon China Index, which tracks Chinese firms listed on the US exchange, has gained 22 per cent over the same period.
Founded in 1999, Ctrip went public on Nasdaq in 2003, as part of an early wave of Chinese tech companies lured by high valuations overseas.