China's Alibaba seeks to buy food delivery app Ele.me: shareholder

SHANGHAI/BEIJING (Reuters) - Chinese e-commerce giant Alibaba Group Holding Ltd is in talks to buy the food delivery platform Ele.me but no deal is yet in place, a stakeholder in Ele.me said in a filing on Tuesday.

Beijing Hualian Department Store Co Ltd said Alibaba was in discussion with Rajax, which owns and runs Ele.me, about adding to the roughly quarter stake in the platform the e-commerce giant already owns.

“Alibaba has recently contacted all the owners of Rajax and expressed its intention to buy,” Rajax shareholder Hualian, which has a 2 percent stake, said in its statement responding to local media reports of a buy-out.

“However, the company has not currently signed any agreement to transfer any equity in Rajax to Alibaba. Key issues like price, timing, volume and the method of any equity transfer are still under discussion,” Hualian said.

Two people with knowledge of the plans said Alibaba made the proposal to buy the entire stake in Ele.me this week. One said negotiations were at an early stage and that the deal would help Alibaba by giving it access to Ele.me’s fleet of registered delivery personnel.

Bloomberg reported on Monday that Alibaba would buy out other investors in Ele.me including rival tech giant Baidu Inc, helping boost its last-mile delivery and heating up a battle in food delivery with Meituan-Dianping.

Alibaba did not immediately respond to a request for comment outside normal business hours in China.

Meituan-Dianping, backed by Tencent, has been raising funds to expand and is eyeing a potential initial public offering as early as this year.

Ele.me, which roughly translates as “Hungry?”, is part of a fast-growing - though fiercely competitive - market in China being driven by consumers eager to make purchases on their smart phone, from groceries to cinema tickets.