Bilibili Wins Approval for $200 Million Share Buyback From Tencent
Key Facts
Bilibili announced on October 28 that non-interested shareholders had approved the repurchase of 13,591,090 Class Z ordinary shares, including shares represented by American depositary receipts, for $200 million. The company said the approval related to an agreement tied to a Tencent subsidiary’s subscription for convertible notes due in 2031. It said the repurchase and subscription were linked, with each transaction conditional on completion of the other. The vote result does not mean the deal has closed, as other closing conditions remain to be met. Bilibili expects both transactions to close in early November 2026, subject to those conditions being satisfied.
Under the agreement, a Tencent subsidiary will subscribe for Bilibili convertible notes with an aggregate principal amount of $200 million, alongside a share repurchase of the same value. Bilibili said in filings with the U.S. Securities and Exchange Commission that the amount due from Tencent for the subscription and the amount due from Bilibili for the repurchase would each be settled against the other at closing. This means the two payments will be settled by offset, under the agreement’s mechanism. Implementation of that mechanism remains tied to completion of both transactions. The notes are due in 2031.
The notes’ terms state that they are senior unsecured obligations and carry no periodic interest, while the initial conversion price was set at about HK$155.79 per Class Z share. The price represents a conversion premium of 28.3% over the Hong Kong closing price on September 4. These terms provide a framework for converting the notes into shares at the specified price, while the notes remain an obligation of the company until maturity or conversion. The financing coincides with the share repurchase, rather than the repurchase being a separate step from Tencent’s subscription. Completion of both transactions remains subject to the outstanding closing conditions.
The deal follows broader financing Bilibili announced in September, when it completed a $500 million convertible note offering due in 2031, alongside a concurrent repurchase of about $100 million in Class Z shares. The company said in a closing notice at the time that Tencent’s separate $200 million subscription and the related repurchase were still awaiting approval from independent shareholders and satisfaction of customary conditions. The approval announced on October 28 removed the voting hurdle, but did not satisfy the remaining closing requirements. Bilibili said proceeds from the note offerings would be used to fund the concurrent repurchases, support AI-driven growth and meet general corporate purposes. This places the Tencent agreement within a financing plan that combines share repurchases with funding for corporate uses.
The company’s second-quarter 2026 results showed growth in revenue and profit alongside varying performance across income sources. Revenue rose 8% year over year to 7.94 billion yuan, while net profit increased 55% to 339.1 million yuan. Advertising revenue was 3.13 billion yuan, up 28%, while mobile game revenue fell 14% to 1.39 billion yuan. The platform averaged 116.5 million daily active users during the quarter, up 7% from a year earlier, and users spent an average of 113 minutes a day on the platform. The chief financial officer said gross margin improved for the 16th consecutive quarter, while the chief executive linked the company’s AI plans to improving accuracy and expanding its scope of work.
In the latest closing data available before the vote result was announced, Bilibili shares ended the October 27 session at $13.11, while Tencent shares closed at $49.46. Both figures are closing prices from the session before the company’s October 28 announcement, and therefore do not measure the market’s response to the vote result. The next step is expected to become clear once the closing conditions that Bilibili said it expects to complete in early November 2026 are met. If completed, the share repurchase will coincide with Tencent’s subscription for the notes, with the payments to be settled by offset at closing.