Geely's $2.2bn take-private bid for Zeekr faces investor pushback
Geely has been met with resistance from investors regarding its $2.2bn take-private bid for its electric car unit, Zeekr, reported Reuters.
Early investors, including Contemporary Amperex Technology (CATL), Intel Capital, and Boyu Capital, have expressed concerns that the offer does not reflect Zeekr's fair value.
The investors, who participated in Zeekr's initial fundraising, have voiced their dissatisfaction through two letters to the company's board and a special committee.
They argue that the privatisation price is too low, with the first letter stating that it values Zeekr at only $6.5bn, significantly less than its peers such as Li Auto and Xpeng.
Geely, known for purchasing international brands like Volvo and Proton, announced its intention to fully integrate Zeekr into Geely Auto on 7 May.
This move came as a surprise, especially since Zeekr went public in the US just a year prior.
The bid has also raised speculation about the future of other Geely units poised for Hong Kong listings, such as CaoCao, and the possibility of delisting US-listed units like Polestar.
Geely Auto, which holds approximately two-thirds of Zeekr, and Zeekr itself fall under the Geely Holding umbrella, chaired by Geely founder Eric Li.
A Geely spokesperson stated that discussions with Zeekr's special committee are in progress, while Zeekr, CATL, Intel Capital, Boyu Capital, and Cathay Fortune have not commented. Bilibili, another investor, declined to comment.
The offer, as per Geely Auto's filing, is non-binding, with a binding agreement contingent on the execution of definitive agreements and their terms and conditions.
Eric Li's strategy has shifted from aggressive acquisitions to streamlining operations and reducing costs amidst intense competition in China's auto market.
Zeekr has emerged as an asset for Geely, with sales reaching 41,403 units in the first quarter, a 25% increase year-on-year, surpassing BYD's premium brand Denza.
The investors have urged that any privatisation deal should gain the approval of the majority of "independent minority" shareholders.
The five investors were part of Zeekr's first external fundraising round in 2021, valuing the company at $9bn, and held a combined 6% stake.
A later round in 2023 valued Zeekr at $13bn, but its public valuation dropped to $5.5bn.
Y2 Capital, another investor, has also reportedly sent a letter echoing these concerns.
Geely's offer of $25.66 per American Depository Share of Zeekr is a 24% premium over the average share price before the announcement, below the average US take-private deal premium of 40% since 2023.
Despite this, Zeekr shares are trading above the offer price, closing last at $26.59.
Analysts suggest that Geely Auto may have enough votes to proceed with the privatisation without additional shareholder approvals due to its 65.7% stake in Zeekr.
"Geely's $2.2bn take-private bid for Zeekr faces investor pushback – report" was originally created and published by Just Auto, a GlobalData owned brand.
The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Forbes
20 minutes ago
- Forbes
Fusion Energy May Be The Key To World Hegemony
What would it take for the United States to lose its hegemony to a rising power like China? Right now, America appears to be ahead economically and militarily. However, there is a stark difference between America's national strategy (insofar as one exists) and China's. The US under President Trump calls for regression. It seeks to restore a manufacturing economy that peaked in the 1950s—like an elderly man trying to restore hair where it hasn't grown for decades. It is doubling down on domestic oil, gas and coal. Through tariffs, disparagement of NATO and aggression towards allies like Canada and Denmark, the administration has alienated partners that long supported a US-led world order. China, meanwhile, has a tremendous lead in developing the economy of the future. It has a near monopoly on rare earth minerals, which are needed for electronics, renewable energy systems, defense technologies and more. China leads in solar, wind and batteries, the energy systems growing at the fastest rate. It is ahead in electric vehicles, industrial robotics and drones as well. It probably has achieved parity in artificial intelligence and may surpass the US soon. If China were to take Taiwan, it would control the global market for advanced chip manufacturing. In the background, but probably most importantly, China may be on track to commercialize fusion energy before the US or its disgruntled allies. Unlike the US, China has no domestic energy industry with vocal lobbyists (and purchasable politicians) to slow progress. It is funding fusion as a national strategy while private fusion companies in the West are at the mercy of investors that, for the most part, chase low risk and quick returns. Fusion promises cheap, plentiful, baseload energy without carbon emissions. AI, data centers and industrial robotics powered by fusion would produce goods and services at much lower costs than value chains dependent on fossil-fired electricity. Militaries built on swarms of small, cheap, electronic drones and robots—powered by small, distributed fusion facilities deep underground, safe from attack—would have an edge over competitors using large, expensive, petroleum-powered vehicles with vulnerable supply chains. I cannot overstate the ramifications of China developing fusion first. As an analogy, imagine if Japan and Germany had uncovered vast reserves of oil at home in the 1920s. American and Soviet oil gave the Allies a strategic advantage over the Axis powers. Had the situation been reversed, World War II could have ended differently. While private fusion companies in the West have raised about $8 billion total, China is investing at least $1.5 annually into fusion projects—double what the US government spends. Japanese and German investments in fusion don't even come close. Canada, for the record, has no fusion funding strategy. Moreover, the government of British Columbia, home of industry leader General Fusion, seems not to understand the value of this crown asset.* On all fronts nuclear, China is leaping ahead. In April, its scientists added fresh fuel to an operational thorium molten salt reactor—a first. The thorium reserves found in Inner Mongolia, an autonomous region of China, could theoretically meet Chinese energy demand for thousands of years. The kicker: this reactor design originated in the US. As project lead Xu Hongjie put it, 'The US left its research publicly available, waiting for the right successor. We were that successor." Moreover, in January, China's Experimental Advanced Superconducting Tokamak (EAST) sustained a fusion reaction for 1,066 seconds, setting a new record. Its Burning Plasma Experimental Superconducting Tokamak (BEST) fusion reactor could come online by 2027 and is expected to produce five times the amount of energy it consumes. When BEST announces this milestone, Western fusion companies may be announcing that they've run out of funding. To China, fusion is not a startup project—it's a matter of national interest and security. Its scientists are patenting more fusion-related technologies than any other single country and graduating more doctorates in fusion-related fields. And because China is the top refiner and exporter of the critical minerals needed in fusion reactors (e.g., for magnets), no external force is going to slow their progress. In the meantime, China has a cheap gas station next door—Russia—supplying all the fossil fuels China could need in exchange for support in its war with Ukraine. That support includes critical minerals needed by Russian arms manufacturers. Is fusion energy, along with other Chinese-dominated technologies, enough to end US hegemony? In 1988, historian Paul Kennedy published The Rise and Fall of the Great Powers, a book that tried to explain the relative success (and failure) of powerful states. According to Kennedy, their rise and fall '…shows a very significant correlation over the longer term between productive and revenue-raising capacities on the one hand and military strength on the other.' Essentially, states must balance economic prosperity with strategy. Technological breakthroughs are vital to both. Innovation creates wealth, which enables the state to invest in defense and win wars. While underinvestment in defense leaves the state vulnerable to other powers, overextension and overspending on defense can run an economy into the ground, leaving it unable to sustain a strong military. Now, picture a great power—China—with a military to rival the US and fusion reactors that provide virtually unlimited energy. Imagine the clout China would have in establishing ports, military bases and consumer markets around the world if it could license that fusion technology. A China that exceeds the US in energy, industry, intelligence, mobility and defense is positioned to usurp it. Of course, China could bungle its advantage. Authoritarian regimes have a habit of mismanaging internal dissent, falsifying reality and making preventable mistakes. The rise of China is inevitable, but the self-inflicted decline of the US and its allies isn't. Rather, it's a choice reflecting how societies invest their resources and envision their future. *Disclosure: The author is an investor in General Fusion and sits on its board of directors.
Hamilton Spectator
24 minutes ago
- Hamilton Spectator
U.S. ambassador Pete Hoekstra says Canada's economic hopes align with Trump's goals
OTTAWA - The American ambassador to Canada says U.S. President Donald Trump's goal of enhancing American power aligns with Ottawa's aim of becoming the fastest-growing G7 economy. Ambassador Pete Hoekstra also says frequent talks between Trump and Prime Minister Mark Carney show how much Washington is invested in boosting both countries' economic growth — even though he isn't sure how often the two leaders speak. Hoekstra tells The Canadian Press the important thing is that the exchanges between Carney and Trump happen frequently and aren't leaked to media. Hoekstra says Canada and the U.S. can partner more on producing cars and challenging China's growing share of the global auto market — despite Trump's repeated claim that America doesn't need Canadian lumber or energy and doesn't want Canadian-built cars. The ambassador insists there is 'absolutely no discrepancy' between his focus on win-win partnerships and Trump's tariffs and rhetoric. Hoekstra isn't offering a timeline for trade talks as discussions continue between Ottawa and Washington on tariffs and a possible early start to a review of the North American trade deal this fall. This report by The Canadian Press was first published June 6, 2025.
CNBC
31 minutes ago
- CNBC
The May jobs report wasn't nearly as good as it looked on the surface
Markets applauded the upside surprise Friday from the May jobs count, but traders will want to keep their eyes and ears open in coming months for significant signs of weakness that also appeared in the report. From a headline view, the 139,000 gain in nonfarm payrolls provided a nice bit of relief for a market on edge over the direction of the economy and the impact that President Donald Trump's tariffs might bring. However, several factors in the report bear watching, if not as a signal of impending doom than at least yellow flags that the labor market is a bit more fragile than what appears on the surface. Consider the following: While the monthly number looked good, it was in keeping with a year that has seen job growth slow considerably. Through five months, the average gain is just 124,000, compared to 180,000 for the same period a year ago — a 31% slide. What appeared to be solid growth in previous months isn't as good as it looked. Revisions took down the March and April estimates by a combined 95,000, or 26% below the prior counts. Hiring breadth was terrible. Combined, health care, leisure and hospitality and social assistance — essentially a subcategory of health care that the Bureau of Labor Statistics nonetheless parses out — accounted for 126,000 of the jobs, or nearly all of the hiring for May. Health care benefits greatly from government assistance, which may or may not be drying up depending on how Trump's "big beautiful" spending bill ends up. So if you worked in a medical facility, restaurant or bar, jobs were plentiful. Otherwise, you were out of luck. Wages rose more than expected. While that's a good thing if you're employed, it could work against hopes for lower interest rates if Federal Reserve officials change their thinking and consider the labor market could, in fact, be a source of inflation. Government jobs, a prior significant source of employment gains, fell by 22,000 at the federal level. With cuts from the Department of Government Efficiency approaching 300,000, per Challenger, Gray & Christmas, this will be a space to watch closely as unemployment benefits and severance pay run out. "The May jobs report was mediocre. The headlines were decent, but the details were considerably worse," wrote Bill Adams, chief economist at Comerica Bank. "Tariffs were a headwind to private job growth, with losses in manufacturing, retail, and professional services. Job gains in other cyclical private industries were anemic, reflecting the drag from policy uncertainty." Still, markets liked the report , even if they bet more heavily against significant Fed easing this year. Traders now see zero chance of a rate cut when the central bank meets again in less than two weeks, with odds diminishing of further reductions, according to CME Group data . Instead, investors were relieved that despite an array of headwinds and uncertainty, the labor market is still standing. "It is a good thing that the American economy is so resilient and dynamic because it has been able to endure the headwinds caused by an ever-changing trade policy and higher tariffs," wrote Joseph Brusuelas, chief economist at tax consultancy RSM. "That resilience, though, has its limits, as the May employment report started to show on Friday."
