Big ticket

19 October 2016 By Una Galani Follow @ugalani

Shares in U.S. listed MakeMyTrip jumped 50 pct on the back of a $1.5 bln merger with ibibo, a private rival backed by Naspers. That is despite the pair offering almost no details. It shows how desperate investors are to see a reduction in competition and a path to profitability.

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U.S. listed Indian online travel MakeMyTrip said on Oct. 18 it would buy rival ibibo Group to create the largest player in domestic flight, hotel and bus bookings.

The all-stock tie-up values the combined company at $1.5 billion, Reuters reported, citing a source familiar with the deal.

South Africa-based Naspers is the majority owner of ibibo with a 91 percent stake. The rest is owned by China's Tencent. After the deal, ibibo's shareholders will own 40 percent of the enlarged MakeMyTrip.

Prior to closing, China's Ctrip will convert its $180 million 5-year convertible notes in MakeMyTrip into a roughly 10 percent stake in the company. Ctrip acquired the notes in January.

The enlarged company will have a 20 percent share of the Indian online flight bookings market.

The deal requires approval from MakeMyTrip shareholders and is expected to close by the end of December.

MakeMyTrip shares rose 44 percent to $29.45 by close of trading on Oct. 18, giving the company a market capitalisation of $1.24 billion.

Context News

U.S. listed Indian online travel MakeMyTrip said on Oct. 18 it would buy rival ibibo Group to create the largest player in domestic flight, hotel and bus bookings.

The all-stock tie-up values the combined company at $1.5 billion, Reuters reported, citing a source familiar with the deal.

Prior to closing, China's Ctrip will convert its $180 million 5-year convertible notes in MakeMyTrip into a roughly 10 percent stake in the company. Ctrip acquired the notes in January.

The enlarged company will have a 20 percent share of the Indian online flight bookings market.

The deal requires approval from MakeMyTrip shareholders and is expected to close by the end of December.

MakeMyTrip shares rose 44 percent to $29.45 by close of trading on Oct. 18, giving the company a market capitalisation of $1.24 billion.

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