News: The deal could be worth about $1bn.
Alibaba is planning to divest its 7% interest in the company created by the merger of Meituan.com and Dianping.
Citing people familiar with the matter, the Wall Street Journal reported that the deal could be worth about $1bn, based on the valuations being negotiated in Meituan-Dianping’s existing fundraising round.
Meituan Dianping provides online movie ticketing, restaurant booking and other on-demand services.
Instead of holding on to its minority interest in Meituan-Dianping, Alibaba wants to focus on building up a competing platform of its own.
The e-commerce firm may get less of its proposed amount as Meituan and Dianping are planning a new round of financing, which includes a ratchet clause, giving new investors more shares if the startup’s future IPO is below the valuation they pay in the existing round.
Alibaba’s move to sell stake comes as rival Chinese internet firm Tencent is planning a $1bn investment in Meituan-Dianping.
In order to finance its expansion plans, Meituan-Dianping is raising fresh funds from investors.
People familiar with the matter said earlier, the company has been planning to raise about $3bn from investors, at a valuation of $20bn including the fresh capital.