Bilibili Inc. Announces Pricing of Offering of Class Z Ordinary Shares in Connection with Hedging Transactions of Certain Convertible Notes Investors and Terms of Concurrent Repurchase

Rhea-AI Summary

Bilibili (NASDAQ: BILI, HKEX: 9626) has announced the pricing of two concurrent offerings: a US$600 million convertible senior notes offering due 2030 and a Concurrent Delta Offering of 10,281,240 Class Z ordinary shares. The notes offering includes a 30-day option for initial purchasers to buy an additional US$90 million in principal amount. The Class Z shares are being offered at HK$140.10 per share through Goldman Sachs and Morgan Stanley. The Delta Offering involves borrowed shares and will facilitate hedging transactions by convertible arbitrage investors. No new shares will be issued in the Delta Offering, and Bilibili will not receive proceeds from it. The company plans to use part of the Notes Offering proceeds for a Concurrent Repurchase of shares, which will be subsequently cancelled.

Positive

• US$600 million convertible notes offering strengthens the company's capital position
• Company's commitment to share repurchase demonstrates confidence in long-term strategy
• No new shares being issued in the Delta Offering prevents immediate dilution
• Repurchased shares will be cancelled, potentially benefiting existing shareholders

Negative

• Potential future dilution from convertible notes if converted to shares
• Complex transaction structure may increase market uncertainty
• Additional debt burden from the convertible notes offering

Insights

Capital Markets Specialist

Bilibili's $600M convertible notes offering with share repurchase improves debt profile while indicating management confidence in long-term growth prospects.

Bilibili has announced a complex but strategically important capital markets transaction involving $600 million of convertible senior notes due 2030, with an option for $90 million more. The transaction has several interconnected components that merit close examination.

The core of this announcement is the convertible notes offering, which allows Bilibili to raise substantial capital at presumably favorable terms compared to straight debt. By issuing convertible securities, the company likely secures a lower interest rate in exchange for the potential equity upside offered to investors.

Simultaneously, the company is facilitating a "Concurrent Delta Offering" of 10,281,240 borrowed Class Z ordinary shares priced at HK$140.10 per share. This is a sophisticated hedging mechanism allowing convertible arbitrage investors to establish short positions in Bilibili shares to hedge their convertible note investments. Importantly, no new shares are being issued in this offering and Bilibili receives no proceeds from it.

Perhaps most significant for existing shareholders is the Concurrent Repurchase component, where Bilibili will use part of the proceeds from the notes offering to repurchase and cancel shares. This signals management's confidence in the company's valuation and long-term growth prospects.

This transaction effectively allows Bilibili to refinance and potentially extend its debt maturity profile while simultaneously reducing its share count through the repurchase. The structure suggests the company is taking advantage of current market conditions to optimize its capital structure while sending a positive signal about management's view on the company's intrinsic value.

SHANGHAI, May 21, 2025 (GLOBE NEWSWIRE) -- Bilibili Inc. (“Bilibili” or the “Company”) (Nasdaq: BILI and HKEX: 9626), an iconic brand and a leading video community for young generations in China, today announced the pricing of the separate SEC-registered underwritten offering of its Class Z ordinary shares, par value US$0.0001 per share (the “Concurrent Delta Offering”).

Concurrently, the Company announced pricing of the upsized offering (the “Notes Offering”) of US$600 million in aggregate principal amount of convertible senior notes due 2030 (the “Notes”) pursuant to Rule 144A under the Securities Act of 1933, as amended. The Company intends to grant the initial purchasers in the Notes Offering a 30-day option to purchase up to an additional US$90 million in principal amount of the Notes.

In connection with the Notes Offering, the Company announced the Concurrent Delta Offering, under which 10,281,240 of the Company’s Class Z ordinary shares, that have been borrowed from non-affiliate third parties are being offered in a separate underwritten offering by Goldman Sachs & Co. LLC and Morgan Stanley Asia Limited (the “Underwriters”), each acting severally on behalf of itself and/or its respective affiliates, at HK$140.10 per Class Z ordinary share. The Underwriters will use the resulting short position to facilitate hedging transactions by certain investors subscribing for the Notes, who employ a convertible arbitrage strategy (the “Convertible Arbitrage Investors”). The Company has been advised that each Underwriter is concurrently entering into off-market privately negotiated derivative transactions relating to the Class Z ordinary shares, enabling Convertible Arbitrage Investors to establish their initial short positions in the Class Z ordinary shares to hedge market risk in the Notes. The number of Class Z ordinary shares subject to the Concurrent Delta Offering generally corresponds to such initial short positions of the Convertible Arbitrage Investors. No new Class Z ordinary shares will be issued in the Concurrent Delta Offering. The Company will not receive any proceeds from the Concurrent Delta Offering. The Notes Offering and the Concurrent Delta Offering are contingent upon each other.

The Company will use part of the proceeds from the Notes Offering for the Concurrent Repurchase. The Concurrent Repurchase enables investors to establish some of their initial short positions in the Class Z ordinary shares to hedge market risk in the Notes and reflects the Company’s confidence in its long-term strategy and growth. The repurchased shares will be cancelled.

The Company has filed an automatic shelf registration statement on Form F-3 (including a prospectus) with the SEC. The Concurrent Delta Offering will be made only by means of a prospectus supplement and the accompanying prospectus. Before you invest, you should read the prospectus supplement and the accompanying prospectus and other documents that the Company has filed with the SEC for more complete information about the Company and the Concurrent Delta Offering. You may obtain these documents by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, a copy of the prospectus supplement and the accompanying prospectus may be obtained from Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282, Attention: Prospectus Department, Email: Prospectus-ny@ny.email@gs.com, Telephone: 1 (866) 471-2526; or Morgan Stanley Asia Limited, c/o Morgan Stanley & Co. LLC, 180 Varick Street, New York, New York 10014, Attention: Prospectus Department, Email: prospectus@morganstanley.com, Telephone: 1 (866) 718-1649.

Other Matters

This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any of these securities, nor shall there be a sale of the securities in any state or jurisdiction in which such an offer, solicitation, or sale would be unlawful.

This press release contains information about the pending Concurrent Delta Offering and Concurrent Repurchase, and there can be no assurance that the Concurrent Delta Offering and Concurrent Repurchase will be completed.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue,” or other similar expressions. Among other things, the terms of the Notes, whether the Company will complete the Notes Offering, whether the Concurrent Delta Offering and/or Concurrent Repurchase will be completed, a description of various hedging activities, and statements about Bilibili’s beliefs and expectations, contain forward-looking statements. Bilibili may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its interim and annual reports to shareholders, in announcements, circulars or other publications made on the website of The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Bilibili’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: results of operations, financial condition, and stock price; Bilibili’s strategies; Bilibili’s future business development, financial condition and results of operations; Bilibili’s ability to retain and increase the number of users, members and advertising customers, provide quality content, products and services, and expand its product and service offerings; competition in the online entertainment industry; Bilibili’s ability to maintain its culture and brand image within its addressable user communities; Bilibili’s ability to manage its costs and expenses; PRC governmental policies and regulations relating to the online entertainment industry, general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the Securities and Exchange Commission and the Hong Kong Stock Exchange. All information provided in this announcement and in the attachments is as of the date of the announcement, and the Company undertakes no duty to update such information, except as required under applicable law.

About Bilibili Inc.

Bilibili is an iconic brand and a leading video community with a mission to enrich the everyday lives of young generations in China. Bilibili offers a wide array of video-based content with All the Videos You Like as its value proposition. Bilibili builds its community around aspiring users, high-quality content, talented content creators and the strong emotional bonds among them. Bilibili pioneered the “bullet chatting” feature, a live comment function that has transformed our users’ viewing experience by displaying the thoughts and feelings of audience members viewing the same video. The Company has now become the welcoming home of diverse interests among young generations in China and the frontier for promoting Chinese culture across the world.

For more information, please visit: http://ir.bilibili.com.

For investor and media inquiries, please contact:

In China:

Bilibili Inc.
Juliet Yang
Tel: -86-21-2509-9255 Ext. 8523
Email: ir@bilibili.com

Piacente Financial Communications
Helen Wu
Tel: -86-10-6508-0677
Email: bilibili@tpg-ir.com

In the United States:

Piacente Financial Communications
Brandi Piacente
Tel: -1-212-481-2050
Email: bilibili@tpg-ir.com

FAQ

What is the size of Bilibili's (BILI) convertible notes offering in 2025?

Bilibili's convertible notes offering is US$600 million in aggregate principal amount, with an additional 30-day option for initial purchasers to buy up to US$90 million more.

What is the price per share for Bilibili's (BILI) Concurrent Delta Offering?

The Class Z ordinary shares in the Concurrent Delta Offering are being offered at HK$140.10 per share.

How many shares are included in Bilibili's (BILI) Concurrent Delta Offering?

The Concurrent Delta Offering includes 10,281,240 Class Z ordinary shares that have been borrowed from non-affiliate third parties.

Will Bilibili (BILI) issue new shares for the Concurrent Delta Offering?

No, Bilibili will not issue any new Class Z ordinary shares for the Concurrent Delta Offering, as the shares are being borrowed from non-affiliate third parties.

What will Bilibili (BILI) do with the proceeds from these offerings?

Bilibili will use part of the proceeds from the Notes Offering for a Concurrent Repurchase of shares, which will be cancelled. The company will not receive any proceeds from the Concurrent Delta Offering.