Skift Take

It is no surprise the Qunar has not raised a white flag in reaction to Ctrip's maneuverings. With an injection of $500 million, let the games continue.

[UPDATE: In Qunar’s first quarter of 2015 earnings announcement it stated that it rejected an offer from Ctrip to acquire all of its outstanding shares.

“After careful consideration of such offer, we declined to pursue it in a letter response dated June 1, 2015,” Qunar stated. “However, consistent with our policy to consider all potential strategic opportunities that may benefit our company and our shareholders, we remain open to engaging in further discussions with Ctrip as well as with other strategic players in our sector.”]

Following Ctrip’s investment in eLong and the Priceline Group’s increased investment in Ctrip, Silver Lake led a $500 million strategic investment round into Chinese search and booking site Qunar.

Silver Lake, which has more than $26 billion in combined assets and investments in a wide range of companies, including Alibaba Group and Sabre, led the round, contributing $330 million of the $500 million in senior unsecured convertible notes. Another undisclosed investor chipped in $170 million.

“Qunar will use the capital to continue to expand its mobile presence, grow business lines and further enhance technology capabilities,” the companies stated.

With Ctrip taking a 37.6 percent stake in rival online travel agency eLong, buying the stake from Expedia, and the Priceline Group increasing its equity in Ctrip to 10.5 percent, Silver Lake’s investment in Qunar shores up the metasearch and booking site for the next stage of battle in the highly competitive Chinese online travel market.

Qunar has been the fastest-growing online travel agency in China among the major players but has been recording mounting losses, which critics say have been unsustainable. The margins of Ctrip, the largest online travel agency in China, have been under pressure amidst an intense wave of discounting or “couponing.”

“Qunar is a nimble, fast-growing leader in mobile and online travel bookings, with a technology-driven operating model that gives it a competitive advantage,” said Silver Lake managing director Zheng Wang. “Chinese consumers are spending more money on travel and are increasingly using mobile devices to book their travel related activities. We believe the company is well-positioned to address these secular trends, and under the leadership of Qunar’s strong senior management team, continue to deliver outstanding growth for the company.”


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Tags: qunar, silver lake

Photo credit: CC Zhuang, Qunar co-founder and CEO. Skift

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