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Malay Mail
3 days ago
- Automotive
- Malay Mail
Zeekr investors hit out at Geely's US$2.2b privatisation plan, say EV maker worth more than Nio, Xpeng, Li Auto
Five early investors, including CATL and Intel Capital, have sent letters Say offer values Zeekr far lower than some peers despite better prospects Geely plans to merge Zeekr into Geely Auto unit HONG KONG/SHANGHAI, May 30 — China's Geely is undervaluing its premium electric car unit Zeekr with the US$2.2 billion take-private offer it has made, five early investors in Zeekr have written to its board, according to three sources with direct knowledge of the matter. The investors, including Contemporary Amperex Technology Co Ltd (CATL), Intel Capital and Boyu Capital, who invested in Zeekr's maiden fundraising round, have sent two letters written jointly to the company and a special committee formed to assess the offer, saying that the privatisation price was too low to reflect the fair value of Zeekr, the sources told Reuters. Geely, one of China's most globally known automakers due to its purchase of foreign marquees such as Volvo and Proton, offered on May 7 to privatise Zeekr, saying it wanted to fully merge Zeekr into Geely Auto. Geely Auto owns about two-thirds of Zeekr. Both companies sit under the umbrella of their unlisted parent, Geely Holding. Geely founder and chairman Eric Li also chairs the Zeekr board. The move surprised the market and the auto industry, given how it came just a year after it took the EV brand public in the United States. It has also raised questions on the prospects of two other Geely units preparing for Hong Kong listings, including ride-hailing firm CaoCao Inc, and raised questions over whether Geely might delist its other US-listed units such as Polestar . The other two investors who wrote the letters were Bilibili and Cathay Fortune Corp. A spokesperson for Geely said that talks with Zeekr's special committee were ongoing. Zeekr, CATL, Intel Capital, Boyu Capital, Cathay Fortune did not respond to requests for comment. Bilibili declined to comment. The offer is non-binding according to Geely Auto's filing. A binding commitment will only arise upon the execution of definitive agreements, subject to the terms and conditions, it said. Improving the strategic focus Li has pivoted Geely away from its history of aggressive acquisitions to streamlining operations and cutting costs amid a brutal price war in China's auto market, the world's biggest. He launched last year a campaign to improve the group's strategic focus and eliminate internal competition, which has so far involved it restructuring its brands into two units and merging some teams that were working on digital cockpit technology. Zeekr is now viewed as Geely's best asset – sales of the brand reached 41,403 units in the first quarter of this year with six models, increasing 25 per cent from a year ago and outselling BYD's premium brand Denza. The five investors said in the first letter they sent last week that the privatisation price only valued Zeekr at US$6.5 billion, much lower than peers such as Li Auto, Nio and Xpeng, according to the three sources. They said Zeekr has a better cash flow and profitability prospects than these peers, and urged the deal should only proceed after obtaining the agreement of the majority of the 'independent minority' shareholders. Two of the sources said the investors sent a second letter this week, reiterating what they said in the first letter and urging the Zeekr special committee to carefully review and evaluate the offer. The five investors took part in Zeekr's first external fundraising round of US$500 million that valued it at US$9 billion in 2021. At the time, they together held a 6 per cent stake in the company. A subsequent fundraising round valued the EV maker at US$13 billion in 2023 but a year later it went public at a valuation of US$5.5 billion on a fully diluted basis, less than half of the pre-IPO figure. Two of the sources said Y2 Capital, an investor in Zeekr's IPO, had sent a similar letter voicing concerns to Geely's leadership. Y2 Capital did not respond to a request for comment. Geely's offer of US$25.66 per American Depository Share of Zeekr represented a 24 per cent premium to its average share price over the four weeks prior to the offer announcement. The average premium paid in US take-private deals has been about 40 per cent since 2023, according to LSEG data. Zeekr shares are now trading above the offer price and last closed at US$26.59. However, analysts said that Geely Auto may have sufficient votes to carry out the privatisation without the need for other shareholder approvals given its 65.7 per cent stake in Zeekr. — Reuters
Yahoo
3 days ago
- Automotive
- Yahoo
Exclusive-Zeekr investors criticise Geely's $2.2 billion take-private bid as inadequate, say sources
HONG KONG/SHANGHAI (Reuters) -China's Geely is undervaluing its premium electric car unit Zeekr with the $2.2 billion take-private offer it has made, five early investors in Zeekr have written to its board, according to three sources with direct knowledge of the matter. The investors, including Contemporary Amperex Technology Co Ltd (CATL), Intel Capital and Boyu Capital, who invested in Zeekr's maiden fundraising round, have sent two letters written jointly to the company and a special committee formed to assess the offer, saying that the privatisation price was too low to reflect the fair value of Zeekr, the sources told Reuters. Geely, one of China's most globally known automakers due to its purchase of foreign marquees such as Volvo and Proton, offered on May 7 to privatise Zeekr, saying it wanted to fully merge Zeekr into Geely Auto. Geely Auto owns about two-thirds of Zeekr. Both companies sit under the umbrella of their unlisted parent, Geely Holding. Geely founder and chairman Eric Li also chairs the Zeekr board. The move surprised the market and the auto industry, given how it came just a year after it took the EV brand public in the United States. It has also raised questions on the prospects of two other Geely units preparing for Hong Kong listings, including ride-hailing firm CaoCao Inc, and raised questions over whether Geely might delist its other U.S.-listed units such as Polestar. The other two investors who wrote the letters were Bilibili and Cathay Fortune Corp. A spokesperson for Geely said that talks with Zeekr's special committee were ongoing. Zeekr, CATL, Intel Capital, Boyu Capital, Cathay Fortune did not respond to requests for comment. Bilibili declined to comment. The offer is non-binding according to Geely Auto's filing. A binding commitment will only arise upon the execution of definitive agreements, subject to the terms and conditions, it said. IMPROVING THE STRATEGIC FOCUS Li has pivoted Geely away from its history of aggressive acquisitions to streamlining operations and cutting costs amid a brutal price war in China's auto market, the world's biggest. He launched last year a campaign to improve the group's strategic focus and eliminate internal competition, which has so far involved it restructuring its brands into two units and merging some teams that were working on digital cockpit technology. Zeekr is now viewed as Geely's best asset - sales of the brand reached 41,403 units in the first quarter of this year with six models, increasing 25% from a year ago and outselling BYD's premium brand Denza. The five investors said in the first letter they sent last week that the privatisation price only valued Zeekr at $6.5 billion, much lower than peers such as Li Auto, Nio and Xpeng, according to the three sources. They said Zeekr has a better cash flow and profitability prospects than these peers, and urged the deal should only proceed after obtaining the agreement of the majority of the "independent minority" shareholders. Two of the sources said the investors sent a second letter this week, reiterating what they said in the first letter and urging the Zeekr special committee to carefully review and evaluate the offer. The five investors took part in Zeekr's first external fundraising round of $500 million that valued it at $9 billion in 2021. At the time, they together held a 6% stake in the company. A subsequent fundraising round valued the EV maker at $13 billion in 2023 but a year later it went public at a valuation of $5.5 billion on a fully diluted basis, less than half of the pre-IPO figure. Two of the sources said Y2 Capital, an investor in Zeekr's IPO, had sent a similar letter voicing concerns to Geely's leadership. Y2 Capital did not respond to a request for comment. Geely's offer of $25.66 per American Depository Share of Zeekr represented a 24% premium to its average share price over the four weeks prior to the offer announcement. The average premium paid in U.S. take-private deals has been about 40% since 2023, according to LSEG data. Zeekr shares are now trading above the offer price and last closed at $26.59. However, analysts said that Geely Auto may have sufficient votes to carry out the privatisation without the need for other shareholder approvals given its 65.7% stake in Zeekr.
Reuters
3 days ago
- Automotive
- Reuters
Exclusive: Zeekr investors criticise Geely's $2.2 billion take-private bid as inadequate, say sources
HONG KONG/SHANGHAI, May 30 (Reuters) - China's Geely is undervaluing its premium electric car unit Zeekr (ZK.N), opens new tab with the $2.2 billion take-private offer it has made, five early investors in Zeekr have written to its board, according to three sources with direct knowledge of the matter. The investors, including Contemporary Amperex Technology Co Ltd (CATL) ( opens new tab, Intel Capital and Boyu Capital, who invested in Zeekr's maiden fundraising round, have sent two letters written jointly to the company and a special committee formed to assess the offer, saying that the privatisation price was too low to reflect the fair value of Zeekr, the sources told Reuters. Geely, one of China's most globally known automakers due to its purchase of foreign marquees such as Volvo ( opens new tab and Proton, offered on May 7 to privatise Zeekr, saying it wanted to fully merge Zeekr into Geely Auto ( opens new tab. Geely Auto owns about two-thirds of Zeekr. Both companies sit under the umbrella of their unlisted parent, Geely Holding. Geely founder and chairman Eric Li also chairs the Zeekr board. The move surprised the market and the auto industry, given how it came just a year after it took the EV brand public in the United States. It has also raised questions on the prospects of two other Geely units preparing for Hong Kong listings, including ride-hailing firm CaoCao Inc, and raised questions over whether Geely might delist its other U.S.-listed units such as Polestar . The other two investors who wrote the letters were Bilibili ( opens new tab and Cathay Fortune Corp. A spokesperson for Geely said that talks with Zeekr's special committee were ongoing. Zeekr, CATL, Intel Capital, Boyu Capital, Cathay Fortune did not respond to requests for comment. Bilibili declined to comment. The offer is non-binding according to Geely Auto's filing. A binding commitment will only arise upon the execution of definitive agreements, subject to the terms and conditions, it said. Li has pivoted Geely away from its history of aggressive acquisitions to streamlining operations and cutting costs amid a brutal price war in China's auto market, the world's biggest. He launched last year a campaign to improve the group's strategic focus and eliminate internal competition, which has so far involved it restructuring its brands into two units and merging some teams that were working on digital cockpit technology. Zeekr is now viewed as Geely's best asset - sales of the brand reached 41,403 units in the first quarter of this year with six models, increasing 25% from a year ago and outselling BYD's ( opens new tab premium brand Denza. The five investors said in the first letter they sent last week that the privatisation price only valued Zeekr at $6.5 billion, much lower than peers such as Li Auto ( opens new tab, Nio ( opens new tab and Xpeng ( opens new tab, according to the three sources. They said Zeekr has a better cash flow and profitability prospects than these peers, and urged the deal should only proceed after obtaining the agreement of the majority of the "independent minority" shareholders. Two of the sources said the investors sent a second letter this week, reiterating what they said in the first letter and urging the Zeekr special committee to carefully review and evaluate the offer. The five investors took part in Zeekr's first external fundraising round of $500 million that valued it at $9 billion in 2021. At the time, they together held a 6% stake in the company. A subsequent fundraising round valued the EV maker at $13 billion in 2023 but a year later it went public at a valuation of $5.5 billion on a fully diluted basis, less than half of the pre-IPO figure. Two of the sources said Y2 Capital, an investor in Zeekr's IPO, had sent a similar letter voicing concerns to Geely's leadership. Y2 Capital did not respond to a request for comment. Geely's offer of $25.66 per American Depository Share of Zeekr represented a 24% premium to its average share price over the four weeks prior to the offer announcement. The average premium paid in U.S. take-private deals has been about 40% since 2023, according to LSEG data. Zeekr shares are now trading above the offer price and last closed at $26.59. However, analysts said that Geely Auto may have sufficient votes to carry out the privatisation without the need for other shareholder approvals given its 65.7% stake in Zeekr.
Yahoo
3 days ago
- Automotive
- Yahoo
Exclusive-Zeekr investors criticise Geely's $2.2 billion take-private bid as inadequate, say sources
HONG KONG/SHANGHAI (Reuters) -China's Geely is undervaluing its premium electric car unit Zeekr with the $2.2 billion take-private offer it has made, five early investors in Zeekr have written to its board, according to three sources with direct knowledge of the matter. The investors, including Contemporary Amperex Technology Co Ltd (CATL), Intel Capital and Boyu Capital, who invested in Zeekr's maiden fundraising round, have sent two letters written jointly to the company and a special committee formed to assess the offer, saying that the privatisation price was too low to reflect the fair value of Zeekr, the sources told Reuters. Geely, one of China's most globally known automakers due to its purchase of foreign marquees such as Volvo and Proton, offered on May 7 to privatise Zeekr, saying it wanted to fully merge Zeekr into Geely Auto. Geely Auto owns about two-thirds of Zeekr. Both companies sit under the umbrella of their unlisted parent, Geely Holding. Geely founder and chairman Eric Li also chairs the Zeekr board. The move surprised the market and the auto industry, given how it came just a year after it took the EV brand public in the United States. It has also raised questions on the prospects of two other Geely units preparing for Hong Kong listings, including ride-hailing firm CaoCao Inc, and raised questions over whether Geely might delist its other U.S.-listed units such as Polestar. The other two investors who wrote the letters were Bilibili and Cathay Fortune Corp. A spokesperson for Geely said that talks with Zeekr's special committee were ongoing. Zeekr, CATL, Intel Capital, Boyu Capital, Cathay Fortune did not respond to requests for comment. Bilibili declined to comment. The offer is non-binding according to Geely Auto's filing. A binding commitment will only arise upon the execution of definitive agreements, subject to the terms and conditions, it said. IMPROVING THE STRATEGIC FOCUS Li has pivoted Geely away from its history of aggressive acquisitions to streamlining operations and cutting costs amid a brutal price war in China's auto market, the world's biggest. He launched last year a campaign to improve the group's strategic focus and eliminate internal competition, which has so far involved it restructuring its brands into two units and merging some teams that were working on digital cockpit technology. Zeekr is now viewed as Geely's best asset - sales of the brand reached 41,403 units in the first quarter of this year with six models, increasing 25% from a year ago and outselling BYD's premium brand Denza. The five investors said in the first letter they sent last week that the privatisation price only valued Zeekr at $6.5 billion, much lower than peers such as Li Auto, Nio and Xpeng, according to the three sources. They said Zeekr has a better cash flow and profitability prospects than these peers, and urged the deal should only proceed after obtaining the agreement of the majority of the "independent minority" shareholders. Two of the sources said the investors sent a second letter this week, reiterating what they said in the first letter and urging the Zeekr special committee to carefully review and evaluate the offer. The five investors took part in Zeekr's first external fundraising round of $500 million that valued it at $9 billion in 2021. At the time, they together held a 6% stake in the company. A subsequent fundraising round valued the EV maker at $13 billion in 2023 but a year later it went public at a valuation of $5.5 billion on a fully diluted basis, less than half of the pre-IPO figure. Two of the sources said Y2 Capital, an investor in Zeekr's IPO, had sent a similar letter voicing concerns to Geely's leadership. Y2 Capital did not respond to a request for comment. Geely's offer of $25.66 per American Depository Share of Zeekr represented a 24% premium to its average share price over the four weeks prior to the offer announcement. The average premium paid in U.S. take-private deals has been about 40% since 2023, according to LSEG data. Zeekr shares are now trading above the offer price and last closed at $26.59. However, analysts said that Geely Auto may have sufficient votes to carry out the privatisation without the need for other shareholder approvals given its 65.7% stake in Zeekr. Sign in to access your portfolio
Globe and Mail
01-05-2025
- Business
- Globe and Mail
Intel Stock (NASDAQ:INTC) Slides While Fighting TSMC's 'Trump Boost'
In a bit of an unexpected twist, Taiwan Semiconductor (TSM) recently managed to land what some called a ' Trump boost,' gaining approval from the Trump Administration for bringing in hefty new investment plans to the United States. That left chip stock Intel (INTC) on the back foot, as it struggled to get such investment going that would instead be largely taxpayer-funded. But reports suggest that Intel may have a plan to fight back. Investors, however, were skeptical. They sent Intel shares down nearly 2.5% in Wednesday afternoon's trading. Protect Your Portfolio Against Market Uncertainty Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. Intel does have a plan to beat Taiwan Semiconductor, reports noted. This actually makes sense given what we have seen of Intel in the last few weeks. While certainly, Intel's struggle is uphill—its cash flow is in open decline and there have never been quite so many and so many different competitive forces arrayed against it. But Intel is putting a lot into its comeback tour: huge bets on new machinery to augment its foundry ambitions, the new 18A process that is delivering some huge new possibilities, and a set of massive layoffs that are paring down Intel's expenses at a time when it is looking to fire up its revenue generation. With one variant of the 18A process already able to compete with Taiwan Semiconductor directly, the idea that Intel could take on, and maybe beat, this latest rival is entirely feasible. But What About Intel Capital? One point that new CEO Lip-Bu Tan revealed recently was that Intel Capital—the investment arm of Intel—would not be getting spun off after all, at least, not any time soon. Intel revealed back in January that Intel Capital would be its own operation, but with Lip-Bu Tan's arrival, that came to a halt. In fact, there are signs that Lip-Bu Tan will be looking for Intel Capital to provide some of that capital to Intel itself. Tan noted, 'We have made the decision not to spin-off Intel Capital, but to work with the team to monetize our existing portfolio, while being more selective on new investments that support the strategy. We need to get our balance sheet healthy.' While there is no definitive word as yet on how far Intel Capital got setting itself up to go solo, it is likely that it at least started by now. And with the economy looking a bit shaky, now might not have been a good time for Intel Capital to go it alone to begin with. Is Intel a Buy, Hold or Sell? Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 28 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 33.67% loss in its share price over the past year, the average INTC price target of $21.04 per share implies 5.41% upside potential. See more INTC analyst ratings Disclosure Disclaimer & Disclosure Report an Issue
