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Bitauto receives nonbinding buyout proposal from Tencent, Hammer Capital

Bitauto Holdings Ltd. received a preliminary, nonbinding proposal letter from Tencent Holdings Ltd. and Hammer Capital Management Inc. to buy all outstanding ordinary shares of the company not already owned by Tencent and Hammer Capital or their affiliates in a going-private transaction.

The proposed purchase price is $16 per American depositary share in cash, according to a Sept. 13 news release. Bitauto said it will form an independent special committee to consider the proposed transaction.

Tencent and Hammer Capital also entered into certain support agreements with Bitauto founder and Chairman Bin Li, JD.com Global Investment Ltd. and Cox Automotive Global Investments Inc., who collectively own over 48.5% of the total issued and outstanding shares of Bitauto.

Tencent owns 5,482,683 shares of the company, representing about 7.81% of its total issued and outstanding shares. The buyers intend to fund the transaction with a combination of new and rollover equity capital.

The Chinese company, which provides internet content and marketing services, said that there was no assurance that any definitive offer will be made or that any agreement will be executed.