AutoBeta(AutoBeta.net)07/03 Report--

On the evening of July 2, SAIC announced that its wholly-owned subsidiaries SAIC Hong Kong and Shenzhou Youche and Amber Gem, a subsidiary of Warbug Pincus Fund, signed an "acquisition offer" to acquire no more than 613 million shares held by each of them in cash at a total price of no more than HK $1.902 billion.

Once the acquisition is completed, Shenzhou excellent car will no longer hold a stake in China car rental, and SAIC will hold a 28.92% stake in China car rental to become the largest shareholder. However, the acquisition has not yet been formally signed, and there is some equity pledge.

With the disclosure of this transaction information, the cooperation between BAIC and China car Rental has officially come to an end. On June 1, China car Rental issued an insider announcement that BAIC would acquire a stake of no more than 21.26%. Under the Strategic Cooperation Agreement, BAIC will acquire not more than 450 million shares from Shenzhou Youche, representing approximately 21.26% of the total issued share capital of the Company as at the date of this announcement. However, the details and terms of cooperation between Shenzhou Youche and BAIC are still under negotiation, and there are still many uncertainties about whether strategic cooperation can be reached.

Although SAIC's acquisition of China Rental car on the way is a bit unexpected, as a giant in the domestic automobile industry, it has become a consensus to speed up the development of mobile travel companies.

As early as December 1992, SAIC established its first car rental company-Anji Automobile; in January 2015, SAIC launched EVCARD new energy vehicle timeshare; in December 2018, Hengdao, a mobile travel brand of SAIC, was officially put into operation; in May 2019, the Hengdao car rental brand was officially launched and is now in operation in Shanghai, Zhengzhou, Suzhou and other cities.

As for the significance of this acquisition, SAIC said in the announcement: if this acquisition can be completed as agreed, it will help to accelerate the development of SAIC's travel business. At the same time, based on the principle of marketization, Shenzhou car rental and SAIC can cooperate in improving asset efficiency and exploring service innovation models.

For car rental in China, the acquisition may reverse the difficulties of the past few months. Due to Luckin Coffee's financial fraud, the share price of Shenzhou car rental has fallen all the way, down 52.44 per cent this year.

In this context, Shenzhou excellent car began to sell Shenzhou rental shares. According to the Hong Kong Stock Exchange, on April 9, April 14, April 15 and April 16, China car rental shares held by Shenzhou Youche decreased by 22.688 million shares, 11.097 million shares, 2.031 million shares and 986000 shares respectively, with the shareholding ratio falling from 27.65% to 25.92%.

At present, the cutting between China Rental car and China excellent car is still going on. On June 23, China car Rental announced that it would sell 7.085 million shares in the company, and after the sale, Shenzhou excellent car held about 20.92 per cent of the issued share capital of China car Rental through its wholly-owned subsidiaries.

China International Capital Corporation released a report saying that SAIC's proposed acquisition of a stake in China car rental will help China car rental return to normal operation more quickly, and will also help SAIC to form a layout in various travel segments such as short-term rental, long-term rental and online car-hailing. The financial impact on SAIC is limited.

As news of SAIC's acquisition of China Rental car gradually fermented, China car Rental rose 12.25% to HK $2.84, while SAIC Zhang 3.58% to 18.50 yuan.

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