Alibaba is selling its $1bn of preferred shares in Meituan-Dianping, the online booking and discounts platform, at a steep discount — a move that will put a brake on the Groupon-style company’s fundraising efforts, according to investors.
Meituan-Dianping, which is backed by Alibaba’s ecommerce rival Tencent, had been seeking to raise funds from existing and new investors on terms that gave it a $15bn valuation. But some investors are concerned that Alibaba’s discounted share sale is likely to value the group-buying site at nearer $13bn.
Alibaba was once among the largest shareholders in Meituan but was disappointed by the online group’s October merger with Tencent-backed Dianping, under which with the latter ploughed another $1bn into the merged entity.