Ofo Denies It Is Nearing Sale to Didi
Xu Wei
DATE:  Jul 30 2018
/ SOURCE:  Yicai
Ofo Denies It Is Nearing Sale to Didi Ofo Denies It Is Nearing Sale to Didi

(Yicai Global) July 30 -- Ofo is not close to signing a takeover deal with the world's biggest ride-hailing provider and one of its largest shareholders, Didi Chuxing, the embattled bike-sharing giant said in a statement today.

Tech news site 36Kr reported earlier today that Ofo, officially Beijing Bikelock Technology, has been in talks with Didi throughout July and that the potential buyer has had investigators conducting due diligence for the past two to three weeks. The report cited an anonymous insider.

The pair are tussling over the price and Didi keeps lowering its offer, the insider said, adding that Alibaba, another major shareholder, is making offers but for much less. Didi founder Cheng Wei had reportedly been planning to acquire Ofo for about USD1.5 billion, according to an earlier report by 36Kr. That is about half of what on-demand services provider Meituan paid for Ofo rival Mobike in April, and a large chunk less than what the target's founder Dai Wei is hoping for.

Didi has refused to comment and Ofo co-founder Yu Xin described the reports as 'misinformation,' but 36Kr says the two titans will seal a deal by the end of this month and that employees are already preparing for the takeover. The report quotes one insider as saying that the deal "won't happen so soon," but it is unclear whether this is the same insider.

Ofo is the last major bike sharer still demanding security deposits and this could lead to reduced user numbers and a quicker sale, the report added. Just weeks ago, Mobike began offering deposit-free rides to users nationwide and lesser players, like Hellobike and Didi's own operator Qingju, have rolled out similar but limited offers.

Ofo has since halved the price of its annual subscription to CNY99 (USD14.5), which grants unlimited rides for a year, after unveiling plans to withdraw from Australia, India and all but three European cities as it turns to focus on the home front.

And if a price war with competitors is not enough, the firm is also battling with creditors as it looks to keep its digital lock systems in place. As of midday on July 26, the firm's communication services provider for locks and location tracking had disconnected two million bikes after the sharer had failed to make good on debts tallying CNY4 million (USD591,000). Ofo claims the cycles can still be used as normal.

Editor: James Boynton

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Keywords:   OFO,Didi,Bike Sharing,Sharing Economy,Beijing Bikelock