By Jason Chau

Chinese travel services provider Tongcheng Travel's shares tumbled after it announced an offer to acquire ride-hailing app Dida.

The online travel agency, the second largest in China, said in an exchange filing late Monday that it plans to offer HK$1.42 billion, equivalent to $181.1 million, in cash to acquire all existing 1.03 billion shares of Dida at almost HK$1.39 each, a 9% premium over Dida's last closing price.

It has also proposed a special cash dividend of HK$1.17 per share, which will be paid to all of Dida's shareholders who hold shares on a date to be determined later.

Tongcheng said it plans to finance the acquisition through a HK$1.5 billion loan facility granted by China CITIC Bank International, based in Hong Kong.

As part of the offer, Nomura, serving as financial adviser on behalf of Tongcheng, will also make an offer to cancel over 17 million Dida options outstanding under its pre-initial public offering share option scheme.

Holders of Dida's more than 7.7 million restricted stock units, which are often granted by companies post-IPO as an equity compensation to employees to be fulfilled after a specific time period, will also receive a payout offer from Nomura.

Shareholders accounting for more than a majority of Dida's shares, which are listed in Hong Kong, have irrevocably agreed to the deal.

Tongcheng's shares in Hong Kong fell as much as 8.8% early Tuesday before trimming some losses. The stock was recently 3.7% lower.

Dida's stock soared as much as 97% before paring some gains and were last 87% higher.

Citi analysts said the deal may generate some synergies between the two firms, with Dida supplementing Tongcheng's transportation business while Tongcheng's user traffic could unlock greater value in Dida's large driver network.

However, "given intensified competition in the car hailing industry [and the smaller] scale of Dida and Dida's financial prospects [compared to rivals], we question how large the synergies that could be materialized [are]," they warned.

Both of Dida's revenue and profit after tax declined sharply last year from 2024 and are also below their 2023 figures.

Write to Jason Chau at jason.chau@wsj.com