Chinese ride-hailing giant Didi denies going private rumor

July 29, 2021 10:14 pm

Chinese ride-hailing giant Didi said on Thursday that a rumor that it might become privately owned were not true.

Details: Didi said in a statement that the privatization rumor is not true and that it's "fully cooperating" with relevant government authorities in China in the country's cybersecurity review. 

The statement came shortly after a report in the Wall Street Journal said that Didi was considering going private to placate Chinese authorities and compensate investor losses following its recent initial public offering (IPO). 

Earlier on Thursday, the WSJ reported that Didi has been in discussions with bankers, regulators, and key investors about how it could resolve some of the problems that emerged after its listing in the US on July 1.

Citing people familiar with the matter, WSJ reported that a take-private deal that would involve a tender offer for Didi's publicly traded shares is one of the open preliminary options under consideration. The price of privatization has not yet been determined, but it may be around or above the IPO price, which is $14 per share, said the report.

Context: Due to cybersecurity concerns, Chinese regulators asked Didi as early as three months ago to delay its US IPO and fulfill rectification. However, after weighing the influence of supervision and the interests of investors, the company still decided to make a low-profile debut on July 1.

On July 4, China's cyberspace regulator ordered Didi to pull its main app, which functions like Uber in China, from app stores, on the grounds of "serious violation" of the Cybersecurity Law. A few days later, the Cyberspace Administration of China banned downloads of 25 Didi-owned apps for "serious illegal collection and use of personal information."