This article only represents the author's own views.
It’s not a match made in heaven, at least according to shareholders of Tongcheng Travel Holdings Ltd. (0780.HK), which last week announced it would buy the hotel management, construction and design business of Wanda Hotel Development Co. Ltd. (0169.HK) for 2.5 billion yuan ($342 million). Tongcheng’s shares fell 6% after the announcement, even as Wanda’s shareholders welcomed the news by sending it stock up as much as 24% before the stock closed up a more modest 10%.
The deal, announced April 17 just before the long Easter holiday, gives Tongcheng 100% equity in the management, design and construction assets for Wanda’s nine hotel brands, ranging from luxury to mid-scale, covering 204 properties with 40,200 rooms and another 376 hotels under contract that have yet to open. These will join Tongcheng’s existing portfolio of 2,300 managed hotels, with another 1,400 in the pipeline.