Tencent consortium in US$365m Yixin deal

Ding Yining
Subsidiary Morespark and Hammer Capital Opportunities Fund agrees a US$1.1 billion cash privatization deal with US-listed Bitauto Holdings, Yixin's controlling shareholder.
Ding Yining

A Tencent-led investment consortium will become a controlling shareholder in Hong Kong-listed Yixin Group after it made a share and option purchase offer totalling HK$2.84 billion (US$365 million). 

The announcement came after the agreement of a US$1.1 billion cash privatization deal with US-listed Bitauto Holdings, Yixin's controlling shareholder. 

The joint efforts intend to maintain the listing of Yixin shares on the stock exchange after the close of the offers, according to a stock exchange filing on Monday. 

On completion of the transaction, Yixin's board of directors would comprise at least five members with at least two directors nominated by Tencent and one by Hammer Capital.  

Tencent's subsidiary Morespark and Hammer Capital Opportunities Fund is paying US$16 per share for Bitauto, which will be delisted following the transaction's completion. 

JD Financial holds about 10.7 percent shares in Yixin which will be excluded from the joint offer. 

Yixin shares opened up 4.7 percent in Tuesday’s morning session.  

Yixin Group, which offers automobile finance facilitator services, was listed in 2017 in the Hong Kong stock exchange as a spin-off from Bitauto Group, and has seen a challenging business outlook given weak automobile sales in recent months. 

Bitauto’s revenue in the first quarter dropped 40 percent to US$245.4 million amid shrinking demand for auto transactions since the COVID-19 outbreak. 

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