$300 million in new money for BitAuto

06 Jun 2016

Updated 5:30 p.m. Eastern with Cox holdings details

If BitAuto is determined to become a clear No. 1 among automotive websites in China, it’s got even more money and major backers behind it to make it happen.

BitAuto (NYSE ADRs: BITA) today announced a $300 million investment package from three Chinese internet powerhouses — Baidu, Tencent and JD.com — and a Chinese investment firm. Tencent and JD.com were already investors in BitAuto; Baidu, the Chinese search giant, is a new investor, as is PA Grand Opportunity Ltd.

Each of the internet companies agreed to buy almost 2.5 million newly issued shares in BitAuto, for $50 million. PA Grand Opportunity agreed to buy $150 million in convertible bonds, and in turn sell some of those bonds to William Li, CEO and chairman of BitAuto.

When the transactions close, JD will own 23.5 percent of BitAuto, with Tencent at 7.1 percent, Baidu at 3/2 percent and the bond-holders at 8.2 percent. Cox Automotive Group in the U.S. is the the No. 2 shareholder in BitAuto; today’s investment reduced its stake to 12 percent, the company said.

We are delighted to announce today the strengthening of our strategic partnership with JD.com and Tencent, and the establishment of a new partnership with Baidu, the leader in Chinese language online search,” Li said in the announcement, which was released just before the New York market open. “We are also pleased to welcome PAG, a leading regional private investment firm, as an important investor. My personal participation in this transaction is a further testament to management’s strong confidence in BitAuto’s future development.”

AutoHome (NYSE: ATHM) is the other major automotive site in China. It’s embroiled in a major battle between its CEO, James Qin, and Telstra, the Australian telecomms company, which is trying to sell a 48 percent stake in AutoHome to a Chinese insurance company for $1.6 billion. (Bloomberg offered terrific coverage of that dust-up last week; it’s worth the click.)

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