BILIBILI Prices $700M Convertible Notes With Tencent Taking $200M
Bilibili sells zero-coupon 2031 converts at a 28.3% premium, funds up to $300M in buybacks, while Tencent subscribes $200M and sells 26.4 million shares.
Bilibili (BILI) priced US$700 million in convertible senior notes due 2031, including US$200 million subscribed by Tencent through a subsidiary. The deal comes with a concurrent equity placement and a special buyback program of up to US$300 million, and the company says proceeds beyond the repurchases go to AI-driven growth and general corporate purposes.
The notes are senior unsecured obligations maturing on September 15, 2031, and they will not bear regular interest, with no accretion of principal. The initial conversion rate is 50.3374 Class Z ordinary shares per US$1,000, equal to roughly HK$155.79 per share, a 28.3% premium to the September 4 close of HK$121.40 in Hong Kong and a 35.0% premium to the placement reference price of HK$115.38.
Bilibili may redeem the notes for cash on or after September 28, 2029 if the shares trade at at least 130% of the conversion price over a specified window, and can also call them once less than 10% of the original principal remains or upon certain tax events. Holders can require repurchase on September 15, 2029 or on certain fundamental changes.
Alongside the marketed US$500 million tranche, banks placed 6,976,760 Class Z shares borrowed from third parties at HK$115.38 to let convertible arbitrage investors set up hedging short positions. Tencent separately sold 26,374,900 Class Z shares at the same price through a placing agent, and keeps the proceeds; Bilibili issues no new shares and receives nothing from the placement.
On the buyback side, Bilibili was allocated 6,795,540 shares from the delta offering and agreed to repurchase 13,591,090 shares held by Tencent, both at HK$115.38. The Tencent repurchase requires approval by at least three-fourths of disinterested shareholders at an extraordinary general meeting to be convened in the near future.
The structure lets Bilibili raise long-dated, interest-free capital while buying back roughly 20.4 million shares, partly offsetting the dilution embedded in the converts. It also marks a notable reshuffling of Tencent's stake, with the strategic shareholder swapping equity for convertible paper and cash. The notes were offered only to non-U.S. qualified institutional buyers under Regulation S, and the company cautions there is no assurance the transactions close.
This is a factual summary of a public filing or press release, not investment advice. Verify all figures against the source before acting on them.
