Tencent and Bilibili strike $700 million convertible-note deal

Bilibili Inc. announced a $700 million convertible senior-note offering due 2031. Tencent Holdings Limited, through a subsidiary, agreed to subscribe for $200 million of the notes on the same terms as other investors. Simultaneously, Tencent will sell roughly 26.4 million Class Z ordinary shares at a reference price of HK$115.38 per share, generating about $400 million in gross proceeds for Bilibili. The company will use a portion of the note proceeds to repurchase the same number of shares from Tencent and to conduct an additional public buy-back of $100 million to limit dilution.

Bilibili Prices $700 Million Convertible Notes, Tencent Takes $200 Million Stake — BigGo Finance Bilibili Taps Tencent In $700 Million Note Deal South China Morning Post

The notes carry an initial conversion rate of 50.3374 shares per $1,000 principal, equivalent to a conversion price of approximately HK$155.79 per share. This price reflects a premium of roughly 28.3 % over the scheduled September 4 closing price of HK$121.40 on the Hong Kong Stock Exchange and about 35.0 % above the reference price of HK$115.38. Bilibili plans two repurchase programs: a “delta” repurchase of 6,795,540 shares and a direct repurchase of 13,591,090 shares held by Tencent, both at HK$115.38 per share. The board has authorized a separate special share-repurchase programme of up to $300 million.

Bilibili Prices $700 Million Convertible Notes, Tencent Takes $200 Million Stake — BigGo Finance Bilibili Taps Tencent In $700 Million Note Deal South China Morning Post

Analysts view the structure as a shift for Tencent from a core equity holder to a major creditor, allowing the firm to retain exposure to Bilibili while reducing portfolio risk. The convertible-note format provides Bilibili with flexible financing for its costly artificial-intelligence initiatives without immediately diluting existing shareholders.

South China Morning Post

Bilibili stated that the net proceeds will fund the two share-repurchase programs, support AI-driven growth projects—including content-understanding, recommendation and creation tools—and cover general corporate needs. The company emphasized that the arrangement is designed to strengthen its balance sheet while advancing its AI strategy.

Bilibili Taps Tencent In $700 Million Note Deal

Following the announcement, Bilibili’s Hong Kong-listed shares fell as much as 2.7 % in early trading before closing up nearly 2 % at HK$123.80, while its U.S.-listed shares rose about 3 % in early Friday trading. The deal is expected to provide the cash needed for AI development, mitigate dilution risk, and signal continued strategic alignment between the two leading Chinese internet firms.

South China Morning Post