报告名称：Ctrip Alert(CTRP.OQ)Further Acquisition at Cost of Dilution
报告类型：海外市场
报告日期：2016-01-13
研究机构：德意志银行股份有限公司
页数：1
简介：What happened last night:
Ctrip announced plans to further communicate with some minorityshareholders of Qunar in order to acquire more shares from them. Ctrip willpay USD1.3bn in cash and issue around 5.4mn ordinary shares (including2.66mn shares issued yesterday).
What's the impact? Broadened acquisition of Qunar at the cost of 10pctdilution:
1. The proceeds of the stock issuance will amount to USD937mn. Togetherwith the USD1.3bn in cash, this approx USD2.2bn will enable a 44% stake inQunar, based on last closing price of USD38.16.
Although the detailed share swap price terms were not disclosed in last night'sannouncement , we believe it is fair to use the highest price after the merger wasannounced (i.e. USD 54.78 in December 30th, 2015) as our assumption. Undersuch price terms, USD2.2bn translates into a 30% stake.
Upon the share swap with Baidu in October 2015, CTRP acquired a 45% stakein Qunar. From the December share issuance to Qunar employees, Ctripcaptured another 11% stake. This 30-44% stake acquisition thus brings Ctripownership to an absolute majority of shares in Qunar.
2. The new stock issuance plan will dilute Ctrip shares by around 10%. Followingthe share swap with Baidu and stock issuance to Qunar employees, Ctrip'scontinued dilution could create concerns for existing shareholders. While webelieve the take-out is worth the cost of dilution considering the potentialbenefits of easing competition.
What's next:
In past three months, both Ctrip and Qunar offered only limited disclosure asthe deal had not yet been fully closed. with the appointment of newmanagement at Qunar and the further acquisition of minority shareholderstakes, we believe going forward both companies will put more focus onbusiness cooperation. Both companies' management teams have indicatedthat they are busy with new year budgeting. The two companies seem at theoutset to be focused on supply chain integration and technology sharing.
TP change:
With this, our first major piece of research issued since Ctrip's share split, wehereby adjust our target price accordingly.

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