Bitauto Holding cash privatization deal in top gear
Auto sales returned to positive growth in May.
An investors' consortium led by Tencent has entered a definitive agreement with NYSE-listed Bitauto Holding regarding a US$1.1 billion cash privatization deal of the US-listed company.
Tencent's subsidiary Morespark and Hammer Capital Opportunities Fund are paying US$16 per share for Bitauto, whose shares added 9.56 percent to US$15.7 on Friday, the highest in the year.
Bitauto is also a controlling shareholder of Hong Kong-listed Yixin Group which offers automobile finance facilitator services.
The privatization offer came at a premium of 16.4 percent to Bitauto’s closing price on Thursday.
Bitauto Holdings received the privatization offer in September last year, and the transaction is expected to be completed in the second half of this year.
The online car info and trade facilitation platform said auto sales returned to positive growth in May and are expected to continue into June.
"Despite the downturn in the first quarter, advertising business will be recovering robustly as auto sales rebound and automakers become increasingly aware of our improved traffic and sales leads," said Chief Executive Officer and Director Zhang Xu'an.
Hong Kong-listed Tencent is cementing its foothold as the online economy becomes a focal point with business operations gradually resuming from lockdown measures.
Tencent became a minority stakeholder with a 7.8 percent stake of Bitauto in 2015.
Tencent-backed e-commerce site JD.com also holds a 25 percent stake in Bitauto.
Bitauto becomes the latest US-listed Chinese company to seek alternative funding outside the US stock market amid geopolitical tensions.
