SCHEDULE 13D/A: Geely Proposes Privatization of ZEEKR Intelligent Technology at a 13.6% Premium

Geely Automobile Holdings Limited has submitted a preliminary non-binding proposal to acquire all outstanding shares of ZEEKR Intelligent Technology Holding Limited not already owned by Geely, aiming to privatize and delist the company from the NYSE.

Summary

• Geely Automobile Holdings Limited (Geely) has made a preliminary non-binding proposal to acquire all issued and outstanding ordinary shares and American Depository Shares (ADSs) of ZEEKR Intelligent Technology Holding Limited (ZEEKR) not currently beneficially owned by Geely.
• The proposed transaction values ZEEKR at US$2.566 per ordinary share or US$25.66 per ADS.
• ZEEKR shareholders and ADS holders will have the option to receive either cash (US$2.566 per share / US$25.66 per ADS) or Geely shares (1.23 Geely shares per ZEEKR share / 12.3 Geely shares per ADS).
• If a shareholder or ADS holder fails to make a valid election, they will be deemed to elect the Cash Alternative.
• The proposed cash consideration represents a premium of approximately 13.6% to ZEEKR's ADS closing price on the NYSE on May 6, 2025, and a 20.0% premium to the 30-day volume-weighted average price ending May 6, 2025.
• Geely currently beneficially owns 1,668,996,860 Zeekr Shares, representing approximately 65.7% of the total issued and outstanding Zeekr Shares.
• The transaction, if completed, would result in ZEEKR becoming a wholly-owned subsidiary of Geely and being delisted from the New York Stock Exchange.
• Geely intends to finance the transaction through the issuance of Geely Shares, cash on its balance sheet, and potentially debt financing.
• The proposal is non-binding and subject to customary commercial, legal, financial, and accounting due diligence, as well as the negotiation and execution of definitive agreements.

Sentiment

Score: 8

Explanation: The sentiment is highly positive for ZEEKR shareholders due to the significant premium offered in the privatization proposal. While non-binding, it signals a strong intent from the majority owner.

Positives

• The proposed cash consideration offers a premium of approximately 13.6% to ZEEKR's closing ADS price on May 6, 2025, providing an attractive exit opportunity for current shareholders.
• The offer represents a 20.0% premium to the 30-day volume-weighted average price of ZEEKR ADSs, indicating a significant uplift for recent investors.
• Shareholders are offered flexibility with both a cash alternative and a stock alternative (Geely shares), allowing them to choose based on their investment preferences.

Negatives

• The proposed transaction would result in ZEEKR being privatized and delisted from the New York Stock Exchange, removing its public trading liquidity and independent market valuation.
• The proposal is preliminary and non-binding, meaning there is no guarantee that definitive agreements will be reached or that the transaction will be consummated.
• The stock alternative involves receiving shares of Geely Automobile Holdings Limited, which introduces exposure to a different stock exchange (Hong Kong) and potentially different market dynamics and regulatory environments.

Risks

• The proposal is non-binding and subject to various conditions, including satisfactory due diligence and the negotiation and execution of definitive agreements, meaning the transaction may not proceed.
• There is no guarantee that the independent, disinterested members of ZEEKR's Board will endorse the proposal, potentially leading to its rejection or renegotiation.
• Geely may explore other strategic alternatives, including different corporate transactions, sales or acquisitions of shares/assets/businesses, or other business combinations, which could alter or supersede the current proposal.
• The valuation of the stock alternative is based on Geely's historical volume-weighted average price and a specific exchange rate, which are subject to market fluctuations and currency risks until the transaction closes.

Future Outlook

Geely intends to move expeditiously to complete the proposed transaction, subject to satisfactory due diligence and the negotiation and execution of definitive agreements. The Geely Reporting Persons also stated they will continue to explore various potential alternatives regarding their investment in ZEEKR, which could include other corporate transactions, sales or acquisitions of shares/assets/businesses, or other business combinations, potentially leading to a delisting.

Management Comments

• Geely believes that its proposal provides an attractive opportunity for ZEEKR's shareholders and ADS holders.
• Geely is interested only in pursuing the transaction and does not intend to sell its stake in ZEEKR to any third party.
• Geely expresses commitment to working together to bring this proposed transaction to a successful and timely conclusion.

Industry Context

This proposal reflects a trend of parent companies seeking to consolidate ownership of their publicly traded subsidiaries, particularly in the automotive and electric vehicle (EV) sectors, to gain full control, streamline operations, and potentially reduce public company costs. It also highlights the ongoing strategic maneuvers within the competitive global EV market, where established automotive groups are integrating their EV brands more closely.

Comparison to Industry Standards

• The proposed premium of 13.6% to the last closing price and 20.0% to the 30-day VWAP falls within the typical range for take-private transactions, which often see premiums between 10% and 30% over pre-announcement prices.
• No specific comparable companies, projects, or results were mentioned in the document for a direct comparison of ZEEKR's performance or valuation against industry peers.

Corporate Governance

Related Party Transactions

• The proposed acquisition is a related-party transaction as Geely Automobile Holdings Limited currently beneficially owns approximately 65.7% of ZEEKR Intelligent Technology Holding Limited.

Stakeholder Impact

• Shareholders: Potential to receive a significant premium for their shares, but will lose their investment in a publicly traded entity.
• Employees: No direct impact mentioned, but privatization could lead to operational restructuring or integration with Geely.
• Customers: No direct impact mentioned, but a change in ownership structure could influence future product development or market strategy.
• Suppliers: No direct impact mentioned, but integration into Geely's larger supply chain could occur.
• Creditors: Potential impact from changes in ZEEKR's corporate structure and financing arrangements, though not explicitly detailed.

Next Steps

• ZEEKR's Board of Directors is expected to evaluate the non-binding proposal independently.
• Geely will proceed with customary commercial, legal, financial, and accounting due diligence on ZEEKR.
• Negotiation and finalization of definitive agreements for the transaction are anticipated.
• Geely will file an amendment to its Schedule 13D and make an inside information announcement pursuant to Hong Kong listing rules regarding this proposal.

Key Dates

Recommendation

Keywords

ZEEKR Intelligent Technology Holding Limited, Geely Automobile Holdings Limited, Privatization, Delisting, Acquisition Proposal, American Depository Shares, Ordinary Shares, Tender Offer, Merger and Acquisition, NYSE, Hong Kong Stock Exchange