BILIBILI-W (09626.HK): Proposes USD 700 million convertible senior notes offering, Tencent to subscribe USD 200 million with simultaneous share placement and buyback

NewTimeSpace News: On 4 September 2026, Bilibili Inc. (stock code: 09626) announced a series of proposed transactions: an offering of convertible senior notes with an aggregate principal amount of USD 700 million due 2031, of which Tencent (through its subsidiaries) has agreed to subscribe for USD 200 million principal amount on the same terms as other investors; a concurrent secondary placement of Class Z ordinary shares (including approximately USD 400 million of existing Class Z ordinary shares held by Tencent and certain shares borrowed from non-affiliated third parties); and repurchases by the Company of approximately USD 100 million (as currently expected) of borrowed shares and USD 200 million of existing Class Z ordinary shares held by Tencent (including in the form of American depositary shares), to mitigate the potential dilution upon conversion of the notes.

In respect of the use of the proceeds of the notes offering, the Company plans to: (a) fund the concurrent hedge repurchases; (b) fund the concurrent Tencent repurchase; (c) fund AI-driven business growth, including enhancing its AI capabilities in content understanding, recommendation and creation, deepening user engagement through its high-quality content and community, and leveraging AI to enhance productivity and efficiency; and (d) for general corporate purposes. Tencent's subscription of the notes also demonstrates Tencent's continued confidence in the Company's long-term prospects.

The concurrent Tencent repurchase constitutes an off-market share repurchase under the Share Buyback Code, which is subject to approval by disinterested shareholders holding at least three-quarters of the votes cast at an extraordinary general meeting; the Company has established a separate special share repurchase plan of up to USD 300 million for the concurrent repurchases, and has appointed Kaolin Capital Limited as its independent financial adviser. The Company has applied for and obtained the approval under Rule 10.06(3)(a) of the Listing Rules from the Stock Exchange, and obtained a waiver from Rule 7 of the Share Buyback Code in respect of the concurrent hedge repurchases. A circular containing details of the concurrent Tencent repurchase, the recommendation of the independent board committee and the opinion of the independent financial adviser is expected to be despatched to shareholders on or before 25 September 2026. As of 3 September 2026, the Company's market capitalisation was approximately HKD 50.1 billion.

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