China Web bookstore pushes IPO
by Shu-Ching Jean Chen in Hong Kong
Beijing-based Dangdang.com, China's leading online bookstore, has decided to
stage an initial public offering offshore in 2005, two years ahead of
schedule, after controlling shareholders earlier this month spurned a
takeover offer from Seattle-based Amazon.com Inc. worth $1 billion.
Amazon.com's takeover attempt, which only became public earlier this month,
failed because Dangdang.com's two main shareholders did not want to cede
control. Amazon.com in February made a parting shot of $150 million for
between 70% and 90% of the company and later raised the offer to $1 billion.
Talks with Amazon began late last year when Amazon CEO Jeffrey Bezos decided
to push forward its entry into China by two years from 2006.
Dangdang.com is now preparing for an IPO in the first half of next year to
raise funds to extend its lead over rivals including Germany's Bertelsmann
AG, which runs a joint venture book club in China and an online shop.
Dangdang.com is owned by holding company Science & Culture Group, which was
founded by Dangdang.com's president Li Guoqing and his wife, Peggy Yu.
"We changed our mind about the IPO plan after our negotiations with Amazon,"
said Dixon Dai, Dangdang.com's marketing director. "Amazon is welcome to
become a minority and strategic shareholder."
Dangdang.com had originally planned to list in 2007 to provide an exit for
its shareholders.
Earlier this month Dangdang.com's controlling Chinese shareholders, Li and
Yu, who is co-president, voted to end the talks.
The husband and wife team, who founded the company in 1999 with $6 million
seed funding from investors including Beijing.-based IDG Technology Venture
Investment Inc., the VC arm of International Data Group of the U.S.,
apparently feared a culture clash.
"Amazon wants absolute control of the company but our shareholders do not
want to lose control," Dai said. Li and Yu together own more than 50% of
Dangdang.com.
In February, Dangdang.com raised $11 million from Julian Robertson's Tiger
Fund of the U.S. in a first round. The Chinese company will not give its
ownership breakdown.
Dangdang.com has yet to appoint a financial adviser or decide where to list.
It is considering Nasdaq, Hong Kong and Singapore.
Li, who founded Science & Culture in the U.S. before returning to Beijing,
hopes that funds raised in the IPO will allow Dangdang.com to make revenue
of 1 billion renminbi ($121 million) in 2006, up from Rmb102 million in
2003. Online sales accounted for nearly 80% of 2003 revenues.
SOURCE: TheDeal.com |
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