Chinese Internet travel website company Ctrip.com International Ltd. has its eyes on offline investments as it has just announced a bigger stake purchase in one of China's leading budget hotel chains, Home Inns.
Ctrip will acquire an additional 7,514,503 ordinary shares of Home Inns & Hotels Management Inc. through a private placement of USD50 million in equity. The purchase price per ordinary share is set at USD6.6538 or USD13.3076 per American Depository Share, calculated as the average of the closing prices for Home Inns' American depository shares on Nasdaq for each trading day within the 30 calendar days preceding the agreement date, up to and including May 6, 2009.
This transaction will increase the Ctrip's ownership in Home Inns by 9.52% to a total of 18.25% of its aggregate basic shares outstanding. Prior to the transaction, the company held 3,443,131 ADS, representing 6,886,262 ordinary shares of Home Inns.
The transaction is expected to close on or before May 21, 2009, subject to customary closing conditions. The company will pay USD20 million at closing and the remaining USD30 million within 30 days of closing.