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‘Didi, Ant Financial eye Ofo’
Posted on Friday, 03 August 2018 09:49
New reports are spinning on Didi Chuxing and Alibaba’s Ant Financial teaming up to acquire Ofo, despite the startup supposedly rejecting a potential offer earlier this year, as a slowdown in China’s bike-sharing industry has prompted sector consolidation.
Sources told South China Morning Post (SCMP) that chief executive Dai Wei stated in an internal company meeting today he would be against a takeover as it would merely result in a “short-term cash reward” and no future for the company.
They noted it appears as though there will not be a bid good enough to tempt Dai to hand over the reins of the bike-sharing startup that competes against the likes of Mobike and Hellobike.
However, despite being against the idea of a sale, it has not stopped the executive from restarting discussions with Didi just months after rejecting an approach from the ride-hailing juggernaut, the people added.
Separately, a source with direct knowledge of the matter told Reuters the institutional shareholder has hired a third-party agency to look at the books of Ofo in order to weigh up a bid in tandem with Ant Financial.
While they may could table an offer valuing the entire company at up to USD 2.00 billion, this figure would be amended downwards depending on whether the state of its business and finances are worse than expected, the person added.
Players in China’s bike-sharing sector have been burning through cash – and are yet to turn a profit - in a desperate bid to gain traction within the fiercely competitive market that has already laid claim to several victims, such as Coolqi and MingBike.
Ofo has started scaling back operations in the US, despite having raised some USD 866.00 million in a round of funding in March from investors keen to gain data on user’s commuting habits, among other things.
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