Bitauto (NYSE: BITA), the Chinese Internet car service provider founded by Nio (NYSE: NIO) founder William Li Bin, will be delisted from the New York Stock Exchange after its shareholders voted to approve a privatization proposal, the company announced Friday.
Shareholders representing about 88.9 percent of Bitauto's total outstanding shares participated in the vote, and ultimately, they approved the privatization agreement with about 99.9 percent of the votes cast in favor.
Bitauto will work with the other parties to the privatization agreement to satisfy the closing conditions and close the transaction in a timely manner.
Upon completion of the transaction, Bitauto will become a privatized company and its shares will no longer be listed or traded on any stock exchange.
In September 2019, Bitauto received a preliminary non-binding privatization offer in which a group of buyers, including Tencent and Hammer Capital, proposed a cash price of US$16 per ADS for the privatization transaction.
Bitauto CEO Zhang Anxu said in an email at the time that four years ago, Bitauto took the initiative to bring in Tencent as a shareholder of Bitauto in order to grow bigger and stronger. Over the past four years, Bitauto and Tencent have enjoyed a close and fruitful relationship," Zhang Anxu said in an email.
"Four years later, Tencent has once again offered to increase its stake in Bitauto. Tencent's move was also fully supported by William Li Bin and major shareholders such as JD.com and AutoTrader."
That coincided with a time of great difficulty for Nio, when Bitauto founder William Li Bin compromised with Tencent on Bitauto's interests.
In June 2020, Bitauto announced that the company's board of directors had unanimously approved and formally signed a legally binding merger agreement with a buyer group consisting of Tencent Holdings and Hammer Capital.
The buyer group purchased Bitauto shares at a cash price of $16 per ADS, for a total transaction value of $1.1 billion. The transaction will use the Buyer Group's own funds and equity uplift and will not involve debt financing.
The merger is expected to close in the second half of 2020, with the investor consortium funding the acquisition with a combination of cash and existing equity. Thereafter, Bitauto will become a privately held company and will be delisted from the NYSE.
Founded in 2000, Bitauto is one of the earliest automotive Internet companies in China, with William Li Bin, the current Chairman of Nio, as its founder and Chairman.
In 2010, Bitauto landed on the New York Stock Exchange and was the first overseas-listed automotive internet company in China.
In 2015, Tencent became a strategic shareholder of Bitauto, and the two companies have been working closely together ever since.
In January 2018, William Li Bin stepped down as CEO of Bitauto to focus on the development of Nio.
According to Bitauto's second quarter earnings data, the company reported revenue of $1.96 billion in the second quarter, compared to $2.79 billion in the same period last year, down 29.7%, and a net loss of $536.4 million, compared to a net loss of $136.2 million in the same period last year.
Prior to the announcement of Bitauto's privatization, William Li Bin held a 10.9% stake in the company, while JD.com was the largest shareholder with a 24.4% stake.
Four months ago, Bitauto celebrated its 20th anniversary, and the Bitauto executive team held a celebration with Bitauto's investors and employees. Bitauto was still strongly influenced by William Li Bin, who gave a speech at the event.
William Li Bin also said in WeChat friend circle, "Bitauto is 20 years old! Bitauto is fortunate to be a witness, participant, contributor and beneficiary of the take-off of China's two major automotive and internet industries."
William Li Bin pointed out, "In the next 20 years, the automotive industry will enter a new era, bringing unlimited possibilities for Bitauto's future. 20 years old, youthful, Bitauto championship team continues to move forward!"
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