OTA Qunar has announced that its small and medium shareholders have endorsed its proposal to swap shares with Ctrip. With all stumbling blocks cleared out, both OTAs are ready to go ahead with the transaction.
“I’ve invested in China’s concepts stocks for 10 years and have found the way Qunar’s management deal with its shareholders, including its employees, to be refreshingly open,” a well-known fund manager said.
After getting approval for the transaction by its small and medium shareholders, Qunar will step up cooperation with Ctrip, and both OTAs will join hands to bolster the development of online tourism services and the overseas presence of China’s tourism industry.
Baidu and Ctrip announced on October 26 2015 they had signed share swap agreement which gave Ctrip all of Baidu’s Qunar shares. The deal also made Baidu the single largest shareholder of Ctrip.
The majority of Nasdaq-listed China concepts stocks (including Qunar) are Cayman Island-registered companies, so major shareholders and management have no legal obligation to obtain the approval of small and medium shareholders to make stock transactions. Consulting with all its shareholders was a good-will gesture by Qunar’s management.
One fund manager working in Asia commented that the fact that Qunar’s management made the gesture even after approval for the transaction had already been won from its major shareholders is praiseworthy, as it ensured employees’ benefits are protected and they got small and medium shareholders on their side. It's a win-win outcome for a very complex transaction of overseas listed Chinese concepts stocks. In the long-term, strengthened ties between Qunar and Ctrip will add value to investors and China’s online travel industry overall.(Translation by David)
