Meituan Dianping, the Chinese restaurant review and delivery company, has attracted Hong Kong tycoon Li Ka-shing to an initial public offering that could raise as much as $4.4 billion, sources say.
Mr Li, who is Hong Kong's richest man, is planning to buy stock in the offering in his personal capacity. Thomas Lau, the chairman of department store operator Lifestyle International, is also said to be preparing an investment.
Dianping started taking orders earlier this week for what is set to be one of Hong Kong's biggest IPOs of 2018. Five cornerstone investors, including existing backer Tencent, have agreed to buy a combined $1.5bn of stock.
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Dianping said on Thursday it planned to keep on investing in money-losing businesses such as food delivery but did dial down its car-hailing ambitions, signalling a willingness to throttle back on a spending frenzy that’s pushed it deeper into the red.
In the local food arena, Dianping plans to invest on signing up more restaurants and helping them manage everything from crafting online menus to book-keeping. Choking off further spending on ride-sharing would at least avert a potentially costly battle with market leader Didi Chuxing, which lost 4bn yuan (Dh2.14bn)) in the first six months of 2018, people familiar with the matter said.
In the four months ended April, Dianping’s revenue surged 95 per cent to 15.8bn yuan, while losses almost tripled to 22.8bn yuan. That includes the impact of acquiring unprofitable bike sharing start-up Mobike.