SCHEDULE 13D/A: OneConnect Financial Technology Faces Privatization Bid by Major Shareholder Bo Yu Limited

Bo Yu Limited, a subsidiary of Ping An Insurance, has proposed to privatize OneConnect Financial Technology Co., Ltd. through a scheme of arrangement, offering HK$2.068 per share.

Summary

• Bo Yu Limited, a subsidiary of Ping An Insurance (Group) Company of China, Ltd., has proposed to privatize OneConnect Financial Technology Co., Ltd. through a scheme of arrangement.
• The proposal offers HK$2.068 in cash for each Ordinary Share not held by Bo Yu (Scheme Shares).
• Holders of American Depositary Shares (ADSs), each representing 30 Ordinary Shares, will receive the US dollar equivalent of 30 times the Cancellation Price.
• If the proposal is approved and implemented, OneConnect's Ordinary Shares will be delisted from the Stock Exchange of Hong Kong (HKSE) and its ADSs from the New York Stock Exchange (NYSE).
• The proposal was jointly announced by Bo Yu and OneConnect Financial Technology Co., Ltd. on May 15, 2025.
• Bo Yu Limited beneficially owns 541,138,998 Ordinary Shares, representing 46.3% of the class.
• Ping An Insurance (Group) Company of China, Ltd. beneficially owns 605,394,156 Ordinary Shares, representing 51.7% of the class, including shares held by its subsidiaries and those it has the right to acquire.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive for the reporting persons as they are moving to consolidate ownership and privatize the company, indicating strategic control. For public shareholders, it offers a cash exit, which can be positive for liquidity, but removes future public market upside. The fixed price offer provides certainty.

Positives

• The privatization proposal offers a clear cash exit strategy for existing public shareholders, providing liquidity at a fixed price.
• The establishment of an Independent Board Committee indicates a commitment to corporate governance and an independent evaluation of the proposal, potentially safeguarding minority shareholder interests.

Negatives

• If the scheme is not approved or lapses, restrictions under the Hong Kong Takeovers Code will prevent Bo Yu or its concert parties from making subsequent offers or acquiring voting rights for 12 months without Executive consent.
• The delisting from HKSE and NYSE would remove the company's public trading access, potentially limiting future investment opportunities for current shareholders.

Risks

• The Scheme is subject to the satisfaction of pre-conditions and satisfaction or waiver of conditions as set out in the Joint Announcement.
• If the Scheme is not approved or the Proposal otherwise lapses, the listing of Ordinary Shares on the HKSE and ADSs on the NYSE will not be withdrawn, and Bo Yu and its concert parties will face restrictions on future offers or acquisitions for 12 months.

Future Outlook

The future outlook for OneConnect Financial Technology Co., Ltd. is centered on the proposed privatization. If the scheme of arrangement is approved and implemented, the company will transition from a publicly traded entity to a private one, leading to the withdrawal of its listings on the HKSE and NYSE. If the proposal fails, the company will remain publicly listed, but Bo Yu and its concert parties will face restrictions on future offers for 12 months.

Management Comments

• "Bo Yu and the Issuer made a joint announcement on May 15, 2025, that Bo Yu has requested the Issuer's board of directors to put forward a proposal for the privatization of the Issuer."

Industry Context

This privatization proposal for OneConnect Financial Technology Co., Ltd., a financial technology company, reflects a broader trend where major shareholders or parent companies seek to consolidate ownership, potentially to streamline operations, reduce regulatory burdens associated with public listing, or pursue long-term strategies away from public market scrutiny. The involvement of Ping An Insurance, a major financial conglomerate, suggests a strategic move to integrate OneConnect more closely into its ecosystem or to take it private for internal restructuring.

Management Changes

Corporate Governance

Related Party Transactions

• Bo Yu Limited is a subsidiary of Ping An Insurance (Group) Company of China, Ltd., which is the ultimate beneficial owner of a majority stake in OneConnect Financial Technology Co., Ltd. The privatization proposal is a transaction between these related parties.
• Ping An ultimately wholly owns China Ping An Insurance Overseas (Holding) Limited (PAOH) and Bo Yu.
• An Ke Technology, indirectly wholly owned by Ping An, has the right to acquire shares in Lanbang Investment Company Limited, which holds OneConnect shares.

Stakeholder Impact

• Shareholders (Scheme Shareholders): Will receive a cash payment of HK$2.068 per share (or equivalent for ADSs), providing liquidity but ending their equity ownership in the company.
• Bo Yu Limited/Ping An Insurance: Will gain full ownership and control of OneConnect Financial Technology Co., Ltd., allowing for greater strategic flexibility and integration.
• Employees, Customers, Suppliers, Creditors: No direct impact mentioned in this filing, but privatization could lead to operational changes or strategic shifts that might indirectly affect these groups in the long term.

Next Steps

• The Issuer's board of directors is requested to put forward the privatization proposal to Scheme Shareholders.
• The Scheme requires approval and satisfaction or waiver of pre-conditions and conditions.
• If the Scheme becomes effective, the Issuer will apply to the HKSE for withdrawal of listing of Ordinary Shares.
• The listing of ADSs on the NYSE will be withdrawn in accordance with Rule 12d2-2 under the Exchange Act.

Key Dates

Keywords

OneConnect Financial Technology, Privatization, Scheme of Arrangement, Bo Yu Limited, Ping An Insurance, Delisting, SEC Filing, Schedule 13D, Financial Technology, Corporate Governance, Takeovers Code