Bilibili Inc. reported plans to sell $700 million of convertible senior notes due 2031, a financing move that coincided with a roughly 3% gain in the company’s shares in early trading on Friday.
The notes carry an initial conversion rate of 50.3374 Class Z ordinary shares for each $1,000 principal amount of notes, translating to a conversion price of approximately HK$155.79 per Class Z ordinary share. That conversion price amounts to an approximate conversion premium of 28.3% relative to the closing price of HK$121.40 per Class Z ordinary share on the Hong Kong Stock Exchange on September 4, 2026.
Bilibili said it will allocate the net proceeds from the offering to finance concurrent share repurchases, to support investments in AI-driven growth initiatives, and for other general corporate purposes. As part of the package, the company will execute a concurrent delta repurchase of 6,795,540 Class Z ordinary shares and will repurchase an additional 13,591,090 shares from Tencent, both transactions priced at HK$115.38 per share.
The convertible notes are unsecured senior obligations of the company and mature on September 15, 2031. Noteholders will be permitted to convert their notes at any time prior to the seventh scheduled trading day before the maturity date. The company may elect to redeem the notes for cash on or after September 28, 2029, subject to specified conditions.
Alongside the convertible notes offering, Bilibili announced a fixed-price placement of 6,976,760 Class Z ordinary shares at HK$115.38 per share, intended to facilitate hedging by convertible arbitrage investors. Tencent is also selling 26,374,900 Class Z ordinary shares at that same reference price.
The component transactions tied to Tencent - including Tencent’s $200 million subscription to the notes and the concurrent repurchase of shares from Tencent - are conditioned on shareholder approval at an extraordinary general meeting and other customary closing conditions. The company described these approvals and conditions as prerequisites to completing those specific elements of the financing and repurchase plan.
This set of actions combines a sizeable convertible debt issuance with share repurchases and a fixed-price block offering designed to support hedging activity. The firm identified AI-related investments, repurchases and general corporate needs as the uses for the financing proceeds.
Key points
- Bilibili is issuing $700 million of convertible senior notes due 2031, with an initial conversion price of about HK$155.79 per Class Z share.
- Tencent has subscribed for $200 million of the notes; the deal includes concurrent repurchases and share sales at HK$115.38 per share.
- Proceeds are earmarked for share buybacks, AI-driven growth initiatives, and general corporate purposes, and several transactions require shareholder approval.
Risks and uncertainties
- The completion of Tencent’s subscription and the concurrent repurchase of shares from Tencent is subject to shareholder approval at an extraordinary general meeting and other customary conditions.
- The notes are unsecured obligations and include redemption features that the company may exercise on or after September 28, 2029 under specified conditions.
- Holders may convert the notes only up to the seventh scheduled trading day before maturity, which may affect timing and market dynamics around conversion and hedging activity.