Bilibili Shares Rise on $700 Million Convertible Note Offering With Tencent Participation

Bilibili Inc. (NASDAQ:BILI) shares climbed approximately 3% in early trading Friday after the company announced a $700 million offering of convertible senior notes due in 2031. Tech giant Tencent Holdings Limited, a major shareholder, has agreed to subscribe to $200 million of the notes.

Details of the Offering

The senior, unsecured notes will mature on September 15, 2031. According to the company's announcement, the notes have been priced with an initial conversion rate equivalent to a price of approximately HK$155.79 per Class Z ordinary share.

This conversion price represents a significant premium of about 28.3% over the closing price of Bilibili's Hong Kong-listed shares on September 4, 2026. Noteholders can convert their holdings at any time before the seventh scheduled trading day prior to the maturity date.

Use of Proceeds and Repurchases

Bilibili intends to use the net proceeds for several strategic purposes. These include funding concurrent share repurchases, investing in AI-driven growth initiatives, and other general corporate purposes.

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As part of the transaction, Bilibili will repurchase approximately 20.4 million Class Z ordinary shares. This includes a repurchase of over 13.5 million shares directly from Tencent, with both buybacks priced at HK$115.38 per share.

Concurrent Transactions and Market Context

To facilitate hedging activities for convertible arbitrage investors, Bilibili also announced a fixed-price offering of nearly 7 million Class Z shares at the same HK$115.38 reference price. In a separate move, Tencent is selling over 26.3 million of its Bilibili shares at the same price.

The completion of Tencent's subscription to the notes and the concurrent share repurchase from Tencent are contingent upon Bilibili shareholder approval at an extraordinary general meeting and other customary closing conditions.