Lyft rejects acquisition bid by GM
13 Aug 2016
Privately-held ride share operator Lyft has rejected an acquisition offer by minority shareholder General Motors, technology website The Information reported.
According to commentators, GM's acquisition bid suggested the car maker wanted to enter the ride-hailing sector, by combine Lyft's carpooling business model with the concept of autonomous vehicles.
In an age in which commuters found it much easier to hail a ride and carpool, car manufacturing companies like GM had been looking for alternative models of cosharing and car ownership.
GM's Lyft alliance had worked well for the company, and the initial success might have pushed the carmaker to make the offer, according to commentators.
In January, GM had invested $500 million for a 9-per cent stake in Lyft.
The Information report, citing sources familiar with the matter, said that the offer was rejected by Lyft after soliciting other prospective buyers.
The ridehailing company, which was currently worth $5.5 billion, plans to opt for another funding round instead, as it was said to require billions of dollars by way of additional investment to compete with Uber, the industry leader expanding in the global market.
In an interview with Reuters in July, GM president Dan Ammann declined to comment on whether GM would make additional investments in Lyft. In the same interview, John Zimmer, Lyft's president, said his company had several advisers, including investment bank Qatalyst Partners, but declined to comment on funding plans.
Speculation about Lyft's funding plans comes against the backdrop of rival, Uber Technologies Inc, merging its money-losing Chinese operations with those of Chinese rival Didi Chuxing in a deal announced earlier this month.
Didi planned to invest $1 billion in Uber's operations outside of China, giving Uber more money to use against Lyft and other rivals in the US, Europe and other markets.
