2 years Any thoughts on $BITA M&A With 37% Potential Return?     

In September Tencent has made a non-binding offer to acquire Chinese transaction services provider and owner of second largest automotive online classifieds platform – Bitauto. Price is set at $16/share. Before the market fall this used to trade at ~8% spread then at one point exploded to 65% and currently stands at 37%. Obviously the main risk is that Tencent may walk away or reduce the price given the COVID-19 outbreak, however Tencent is a strategic buyer and this is a small transaction for them. Currently the due diligence is still ongoing (for more than half a year already, although it was stated that it was prolonged because of the virus outbreak).

Bitauto is unprofitable, however used to grow rapidly (revenues +36% on average for the last several years). COVID-19 outbreak has already made a strong impact on the business (revenue growth stopped, 2x net loss YoY in 2019, Q1 outlook 20% lower than Q1'19 results), however given the previous growth, maybe the company can recover fast enough once the aftermath of the virus is gone?

Any thoughts on this?

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