Chinese car rental company CAR Inc (HK: 0699) announced on Friday it received a deal to sell the company to North Asia-focused private equity firm MBK Partners for up to HK$9 billion ($1.16 billion).
The consortium plans to offer approximately HK$4 per share to buy all of Car’s shares in cash, a premium of about 18% to the car rental firm's closing price of HK$3.39 per share on Friday.
Goldman Sachs (Asia) and J.P. Morgan Securities (Asia Pacific) are the financial advisors for this deal.
Upon completion of the share sale, MBK Partners will hold 442,656,855 shares of Car Inc, representing approximately 20.86% of the total issued share capital of the Beijing-based car rental company.
The transaction is scheduled to close before December 10, 2020.
Reuters first reported the takeover offer in August. According to four people with knowledge of plans, MBK Partners was in talks to take Car Inc private and planned to offer more than HK$3.10 per share.
Founded in 2007, Car Inc is one of the leading companies within the car rental industry in China. Its nationwide service network covers major cities and tourist destinations in mainland China.
Recently, however, the company’s financial performance has remained under pressure. Although the company has introduced, for example, a number of promotional packages and various digital marketing campaigns to mitigate the historical low car rental demand, the company is still struggling financially, said the company in today’s announcement.
After the takeover offer is complete, MBK Partners intends to “maintain the Car’s existing principal activities, improve efficiency and create shareholder value.”
In particular, the PE firm will assist the firm in reviewing and optimising its debt structure and ensuring liquidity.