Beijing city looks to take Didi under state control, Bloomberg News reports

Sept 3 (Reuters) - Beijing city is considering taking Didi Global DIDI.N under state control and has proposed that government-run firms invest in the Chinese ride-hailing company, Bloomberg News reported.

The central thrust of the city government's proposal is to regain control over one of its largest corporations, and particularly the data it holds, Friday's Bloomberg report said.

Chinese authorities have stepped up their regulation of technology firms in the past year to improve market competition, data handling and their treatment of employees.

Under the preliminary proposal, some Beijing-based companies including Shouqi Group, part of the state-owned Beijing Tourism Group, would acquire a stake in Didi, Bloomberg reported, citing unidentified people familiar with the matter.

Other scenarios being considered include the consortium taking a nominal share, accompanied by a so-called "golden share" with veto power and a board seat, it added.

Didi, Beijing's city government, Beijing Tourism Group and Shouqi Group did not immediately respond to requests for comment.

Shares in Didi rose 1.7% to $8.96 in New York in early-afternoon trading. Some investors welcomed the news, arguing it could remove the overhang of further regulatory uncertainty on Didi's stock.

"A better outcome than going bust like private education," Dave Wang, a portfolio strategist at Nuvest Capital in Singapore, said.

In July, China barred for-profit tutoring in core school subjects, stepping up regulatory oversight of a $120 billion industry that investors had bet billions of dollars on in recent years.

Some investors, however, raised questions over how Didi could pull off such a move while remaining a U.S.-listed company, abiding by the rules of the U.S. Securities and Exchange Commission (SEC) and the New York Stock Exchange (NYSE).

The SEC declined to comment. NYSE has not responded to a request for comment.

"We were expecting some action but not to this level of magnitude. The big question is what will happen to Didi's investors?" said Justin Tang, head of Asian research at investment advisor United First Partners in Singapore.

Legal experts said Beijing had never taken control of a U.S.-listed company. One option would be to assume control of an entity in China that holds Didi's operations but not the holding company of Didi, which is based in the Cayman Islands.

It is unclear whether such a move would require Didi shareholder approval. If it did, its founders could push it through because they own dual-class shares with 51.9% voting control.

"It would depend on which jurisdiction controls that entity. I'm unaware of another situation where a government would take a stake in a publicly listed company in the United States," said William Rosenstadt, a capital markets and securities lawyer at Ortoli Rosenstadt LLP.

The "golden share" arrangement considered for Didi would be similar to an investment the Chinese government has made in TikTok-owner ByteDance's key Chinese entity, Bloomberg said. Unlike Didi, however, ByteDance is not publicly listed.

Shouqi Group owns ride hailing service Shouqi Yueche, and Bloomberg said it would play a role in helping operate its larger rival under the proposal.

Didi faces a cybersecurity investigation by Chinese authorities after its New York initial public offering in June.

Reuters reported in August, citing people familiar with the matter, that Didi is in talks with state-owned information security firm Westone 002268.SZ to handle its data management and monitoring activities.

Didi is controlled by the management team of co-founder Will Cheng and President Jean Liu. SoftBank Group Corp 9984.T , Uber Technologies Inc UBER.N and Alibaba 9988.HK are among other investors in the company.

TIMELINE-Didi Global's rapid ride from IPO star to regulatory

Reporting by Chavi Mehta in Bengaluru, Yilei Sun in Beijing, Brenda Goh in Shanghai, Echo Wang in New York, Chris Prentice in Washington, D.C., Anshuman Daga in Hong Kong and Tom Westbrook in Singapore; Editing by Saumyadeb Chakrabarty, Alexander Smith and Richard Chang

免責聲明: XM Group提供線上交易平台的登入和執行服務,允許個人查看和/或使用網站所提供的內容,但不進行任何更改或擴展其服務和訪問權限,並受以下條款與條例約束:(i)條款與條例;(ii)風險提示;(iii)完全免責聲明。網站內部所提供的所有資訊,僅限於一般資訊用途。請注意,我們所有的線上交易平台內容並不構成,也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。


本網站的所有XM和第三方所提供的内容,包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接,皆爲‘按原狀’,並作爲一般市場評論所提供,而非投資建議。請理解和接受,所有被歸類為投資研究範圍的相關内容,並非爲了促進投資研究獨立性,而根據法律要求所編寫,而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊,相關詳情請點擊 這裡查看。

我們運用 cookies 提供您最佳之網頁使用經驗。更改您的cookie 設定跟詳情。

風險提示: 您的資金存在風險。杠杆商品可能不適合所有客戶。 請詳細閱讀我們的風險聲明