Where is Ctrip going to integrate aground?

Summary: Ctrip and where to go gradually away. Ctrip began mergers and acquisitions integration industry chain, the introduction of the international giant Priceline. And where to go also began to compensate the short plate under the line. A new round of battles will erupt. Good wind with force, send me to the blue sky. Maybe use this to describe Ctrip.

Ctrip and where to go is drifting away. Ctrip began mergers and acquisitions integration industry chain, the introduction of the international giant Priceline. And where to go also began to compensate the short plate under the line. A new round of battles will erupt.

Good wind with force, send me to the blue sky. Perhaps use this to describe Ctrip and Priceline cooperation more appropriate.

August 7, the world's largest online travel group Priceline Group announced that the form of convertible bonds to Ctrip to invest 500 million of dollars, as if in China's online tourism platform to drop a blockbuster. And all the previous rumors about Ctrip seem to be getting clearer.

So, sad to urge is the art dragon, awkward is to go where, the powerful is Ctrip.

As the leader of China's online tourism industry, Ctrip has been "boys" discredit, and art dragon, go where, the same way nets, cattle nets, such as the price war has been in full swing, and Ctrip's killer is "incorporation", with the network and passers-by cattle network has become a "Ctrip department" a member.

However, Ctrip is not the boss of Ota, it has a greater ambition-to become a bat after the X. Perhaps only from the 2012 Liang Jianzhang back to the helm of Ctrip after a series of changes and movements are not difficult to see, Ctrip's empire quietly rise.

Compared to the global online travel industry giant Priceline600 billion dollar market capitalisation, Ctrip currently market capitalisation is only one-tenth. Even if the previous speculation with the domestic industry where the second to merge, the market value has just more than 10 billion U.S. dollars. After two years of price war and integration setbacks, perhaps Ctrip more clearly understand that "go out" is the right path.

Join hands with Priceline, Yi-long dream broken

Joint Priceline Let Ctrip internationalization Road took a substantive step.

August 7, 2014, the world's largest online travel company Priceline Group and China's largest tourism group Ctrip announced that the two sides will deepen existing business cooperation to strengthen the global strategic partnership. Priceline will invest 500 million of dollars in the form of convertible bonds to Ctrip.

Ctrip agreed to Priceline in the next year through the open market to buy its shares. Included in the convertible bond shares, Priceline will be expected to hold up to 10% of the total circulation of Ctrip. While buying convertible bonds, Priceline also obtained the right to appoint an observer to Ctrip's board of directors.

This is not the first cooperation between the two sides, the initial cooperation between the two began in 2012, this is an upgraded version of cooperation between the two sides.

It is reported that Priceline and Ctrip will share their respective hotel accommodation on the basis of the original, expand the share of stock sharing scale and with partners preferential terms, including the joint increase in promotional efforts. Priceline will open its customers to more than 500,000 hotels worldwide outside Greater China, as well as Ctrip's more than 100,000 hotel resources in Greater China and will be open to Priceline customers.

In addition, Ctrip agreed to provide its customers with additional Priceline brand services, including those from rentalcars.com and OpenTable platforms. Priceline also agreed to promote Ctrip's other travel services to its clients, including ticket bookings and attractions ticketing services.

"Ctrip is actually a very cheap price to obtain a good international market resources, in particular, hotels, if you want to run a good local market, you must have local resources, this investment is very large, but with the Priceline can be in this way to obtain some overseas tourism products inventory, It is now open to overseas hotel inventory, but there will certainly be other cooperation including some tourism products. For Ctrip, the layout of overseas markets went up a step. For Priceline, before the layout in China only opened booking and ya up, the flagship of some overseas customers, but through Ctrip's domestic hotel resources, can let foreign customers directly through the Priceline book domestic hotels, which also opened the domestic market in China. "Analysys International tourism industry analyst Zhu Zhengyu told the Financial Weekly reporter, in his view, this deal with Cheng value."

Priceline, the world's largest online travel website, has long been the benchmark company for Ctrip, Liang Jianzhang believes that Ctrip is expected to become a "China Priceline" with a market capitalisation of about 30 billion dollars in 2020. This climb on the Priceline, let Ctrip internationalization road a step closer. Liang Jianzhang also admits: "Priceline in addition to being a leading online tourism group, it is the important strategic partner we rely on when we want to expand our global business." ”

It is also pointed out that PRICELINE5 billion dollars can account for 10%, compared to Ctrip currently nearly 8 billion U.S. dollars in market capitalisation, is not underestimated Ctrip? The market value of Ctrip's 10% shares is $800 million trillion, much higher than the PRICELINE5 billion bid.

Zhu Zhengyu explained that it was a misunderstanding: "Because 500 million dollar investment is not a stake, but a convertible bond, which is equivalent to Ctrip borrowed a sum of money, but this convertible bonds can be at any time in the two-tier market into shares, but up to 10%, no matter whether the value of Ctrip is up or down, and 500 million U.S. dollars will not exceed 10%. ”

And for Ctrip How to use this 500 million dollars, Financial weekly reporter call Ctrip, get the reply is currently no specific statement.

Where does the merger go without fruit?

In April this year, Ctrip merged to where the news is noisy, even to the concrete merger structure is rhythmic by the media, until both parties have to through internal mail way statement will not give up the dominant right, it seems this occasion is not groundless.

Prior to the media explosion of the two sides have reached a preliminary agreement, the merger will be 100% to share the way the merger, exchange rate of 1:2. In the light of the combination of Youku and Tudou, after the merger, the potato will return to the city, if the merger is successful where to return to the city, merged with Ctrip.

This speculation is highly credible because of the strong willingness of the two sides to merge capital.

Previously involved in the leading Youku potato merger of the source capital this is also to where investors, and where to the holding side Baidu also intends to facilitate the transaction, because Baidu for Ctrip coveted for a long time. If according to the rumor of the "1:2 share" merger, the new company Baidu shares will be between 15% to 20%, and Ctrip's largest shareholder stake will be around 10%, Baidu will be the new company's largest shareholder.

In addition, the well-known investment institutions high jianling Capital as Ctrip and where to go to two of the company's common shareholders, is a positive and important catalyst for negotiations.

Unfortunately, both sides of the capital side met too hard-line founder of the company-Liang Jianzhang and Zhungchengsu, and both sides have been tough to say will not give up the power, so that later market legends will be implemented "double CEO system."

In fact, the battle between Liang and Chuang may be more intense than imagined. The merger was exposed during the negotiations, with market speculation likely to be a way for negotiators to gain more favourable terms, or a third party to leak early in order to stop the deal.

"The structure of the transaction is in a way of exchanging shares rather than investing in shares, this shows that there is a push behind, Baidu is behind the promotion of strategic cooperation; On the other hand, the exchange of shares shows that the two sides are equal cooperation, but how to equal cooperation, integration will only have a dominant party, without a unified leadership, investment in a stake is meaningless. So the reason for the final failure is that Ctrip and where to go both sides of the dominant right are not disputed. "Zhu Zhengyu thinks.

Another fatal problem is that both sides of the stock are very fragmented, especially Ctrip. Back in 2007, Ctrip started the "Equity dilution measures" (poison pill Plan) because of the highly dispersed shareholding.

The poison pill program means that once an unauthorized party acquires a large stake in the target company, the poison pill program starts, causing the IPO to flood the market, diluting the acquirer's stake, and then making the acquisition expensive. The poison pill project has succeeded in stopping the rumored Tencent plan to buy Ctrip 51% shares at a premium of 50%. This time, Ctrip and let Baidu eat the cold shoulder.

In the ownership structure of Ctrip, the institutional shareholders, including the Oppenheimer Fund, hold 4.63 million shares of the 13.72%,t.rowe price holding 4.4 million shares of 13.13%,bailliegifford holding 1.82 million shares accounted for 5.41%. Liang Jianzhang in Ctrip's shareholding ratio of 1.6%, less than the 2.2% of Ctrip CFO Sun, as well as Ctrip's former CEO fan 2.9%.

And where to go in the shareholding structure, Baidu 62% of the shareholding absolute holding, other institutional shareholders including Jinsha venture, Lehman Brothers, Mayfield, GGV Capital and other companies. The co-founder's shareholding was 7.23%.

In fact, there is a long history of where Ctrip is merged, as early as a few years ago, both sides were exposed to negotiations, where the valuation was only hundreds of millions of dollars. Ctrip hesitate to miss the opportunity, then, where to get under Baidu. This may be the last regret of Ctrip of an unfinished business. In a few years, Ctrip's market capitalisation has changed little, and the market has soared to $ more than 3 billion trillion.

Where to go is a technical company that started with the TTS model of the initial travel search. And Ctrip's OTA agent mode, where to start to do some of their own OTA mode, the two models gradually converge. Recently, Zhungchengsu in the media interview said where to go is kayak+tripadvior+priceline and other companies in China version, of which Kayak's main business is tourism search business, Tripadvior's main business is hotel reviews, Priceline is OTA business.

The eldest brother Ctrip certainly not to be outdone, in addition to where the mobile end and go with the outside, strategic direction began to platform development, set up a financial department, test water Internet finance.

Ctrip Tourism open platform model similar to the day Cat Mall, the traditional travel agency to walk the road of the electric business. In the provision of free, supplier brand revealed, the fastest seven days settlement, such as The Good Foundation, Ctrip opened the platform recently opened a brand new model of agency stores. It is reported that the intention is to allow suppliers to carry Cheng Ping on the platform to cultivate the brand and long-term independent management. The future or will be on the Ctrip platform on the birth of large travel agents or new brands.

It is reported that Ctrip tourism platform business since its inception in the second half of last year, as of July has more than 800 with outbound travel agents qualified suppliers to establish a close cooperative relationship. Plus domestic travel business cooperation suppliers, Ctrip tourism open platform has attracted thousands of of domestic travel agencies to join.

According to Ctrip COO Sun revealed that the tourism and holiday suppliers open platform business volume increased over 10 times times year-on-year. The platform's June turnover exceeded 100 million yuan.

"May Ctrip a series of movements in fact has shown that the willingness to cooperate has been very small, it began in the industrial chain integration, investment, mergers and acquisitions and so on." I think from the perspective of observation, there should be no new progress. Zhu Zhengyu commented.

Reporters called the two sides to inquire about the merger, Ctrip replied to "No comment", where to go CEO Zhungchengsu seems to be a little flustered, and "quarterly out of the front do not accept any interview" as a response to the refusal.