Wu Bo, CEO of Chinese group buying site Lashou, recently disclosed that Lashou has rejected Groupon's acquisition bid. The CEOs of two other group buying sites, who spoke on terms of anonymity, said their companies had also rejected offers from Groupon.
Wu said that Groupon had valued Lashou at USD 500 mln and had planned to purchase a 49% stake, but the Lashou team was reluctant to relinquish that much control. Wu said the team would accept an offer for 39%, and later made a compromise offer of 44%, but Groupon did not respond and Lashou had no choice but to reject the offer.
The CEO of another unnamed group buying site said that the size of the stake was also a key issue in their discussions with Groupon, and believes that many group buying sites in China are currently in the early start-up phase and not yet ready to relinquish control. Management's decision was also influenced by the price and business plan proposed by Groupon.
Editor's Note: For more background on this topic, please see "Groupon, Lashou Discuss Cooperation" MD 10/18/10 issue.