China's JD.com leads fresh $500 mln investment in travel site Tuniu (updated)
08/05/2015 09:11
(Adds Tuniu CFO comment)
BEIJING, May 8 (Reuters) - Chinese travel website Tuniu Corp
TOUR.O said on Friday it has sold $500 million worth of new
shares to a group of investors led by JD.com Inc JD.O , China's
No. 2 e-commerce site, as part of a tie-up to boost its customer
base.
Tuniu sold $350 million of Class A ordinary shares to JD.com
at $5.33 each, with the remainder going mainly to private equity
funds, the pair said in a joint statement.
As part of the deal, JD.com, which has close to 100 million
active customer accounts, will hand over its travel site to be
exclusively operated by Tuniu for five years. JD.com will forgo
commission on its Tuniu-operated site, but collect fees on
flight and hotel bookings made through Tuniu via other JD.com
pages.
Tuniu Chief Financial Officer Conor Yang said the influx of
capital - as well as the guarantee of Web traffic from JD.com -
will help the company establish its brand during a critical
phase in the growth of Chinese tourism.
"We think this year and next will be a tremendous
opportunity for us and we want to continue to be in the right
market position," Yang said by telephone, adding that aside from
marketing, Tuniu will also use the investment to develop its
technical infrastructure and seek out acquisition targets.
For JD.com, the partnership with one of China's leading
travel site could boost its fledgling and potentially lucrative
travel business.
Chinese outbound tourism is likely to reach $264 billion by
2019 from $164 billion last year, according to Bank of America.
Nasdaq-listed Tuniu, which specializes in selling packaged
tours and cruises, reported $570 million in 2014 revenue, up 81
percent from a year prior.
The company's share sale will value its American depository
notes at $16 each, or a 7.3 percent discount to the firm's
Thursday closing price of $17.26.
Tuniu previously received financing from JD.com in December,
when the e-commerce firm led a consortium that injected $148
million.
(Reporting by Gerry Shih; Editing by Christopher Cushing)
((Gerry.Shih@thomsonreuters.com; +86 133 0137 8331))
Keywords: TUNIU JD.COM/INVESTMENT