Tencent backs take-private for China travel site eLong

According to a statement, Tencent is willing to pay $18 per share for all outstanding American Depositary Shares (ADS), which represents a premium of 24.1% to the closing price on the last trading day before the deal was announced. The offer values the company at approximately $344 million.

Tencent intends to finance the transaction through a combination of new and roll-over equity capital provided by itself, eLong management and other shareholders. Other major shareholders include Ctrip International, Keystone Lodging Holdings and its indirect subsidiary Plateno Group.

ELong provides a platform through which travelers can book hotels, guesthouses, apartments and other accommodations, as well as air and train tickets. The company generates most of its income from hotel bookings.

It reported RMB1.09 billion ($175.5 million) in revenue for 2014, little changed from RMB1 billion in 2013. However, the net loss widened to RMB268 million from RMB168 million. Revenue fell 25% year-on-year to RMB218.5 million in the second quarter of this year, with a net loss of RMB356.4 million, compared to a profit of RMB31.5 million in the same quarter of last year.

In May, Expedia sold its majority stake in eLong for $671 million to a group of buyers including Ctrip, Keystone, Plateno Group and Luxuriant Holdings. Ctrip acquired a 37.6% stake for about $400 million.

In March, Addor Capital, a private equity firm owned by China's Govtor Capital, agreed to buy Nanjing Xici Information Technology, which operated an online travel forum under eLong, for $12 million.

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• Topics
• Greater China
• Buyouts
• Technology
• Consumer
• buyout
• China
• Tencent
• TMT
• Consumer