China

Bike-Sharing Firm Ofo Facing Cashflow Issues - Rumoured To Be Acquired By Didi For US$3 Billion

Bike-sharing company Ofo is reportedly close to a takeover by Didi Chuxing, according to 36kr (link in Chinese) on Monday.

The two companies have reportedly restarted a new round of acquisition talks in July this year, almost two months after Dai Wei, co-founder and chief executive, rejected an olive branch extended by Didi co-founder Chen Wei in early April, according to an account by South China Morning Post.

Dai Wei had insisted on keeping the company independent at that time, leading to the breakdown in talks.

Ofo declined to comment when asked by KrASIA on the new round of negotiation on Monday.

Beijing-based Ofo, in the wake of rounds of reports on its cash flow issues, has pulled out of the US, Germany, Australia and Israel among other countries recently, in an attempt to focus on its so-called key markets.

A Decreasing Price Tag

Didi restarted the acquisition talk earlier this month with a price tag of close to US$3 billion, a source familiar with the matter told 36Kr/KrASIAand there have been few rounds of talks

Another source also told us that Didi was coming back with a lower price for every negotiation.

Both Alibaba and Ant Financial are also reportedly in talks to buy over Ofo, although the prices proposed are lower than Didi’s.

Ofo’s potential price of US$3 billion would put it close to rival Mobike’s US$2.7 billion acquisition by O2O giant Meituan Dianping in April this year.

Since last year, Chinese bike-sharing companies have been facing growth and cash-flow related issues. The third largest bike-sharing company then, Bluegogo, went bankrupt late last year and was acquired by Didi earlier this year.

This article is written by Yee Kai (edited by Ben Jiang) and was first published on Kr ASIA.

Featured Image Credit: Xinhua

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