Baidu, Tencent, JD.com, and investment firm pour $300M into Bitauto

• Search giant Baidu (NASDAQ:BIDU +1%), messaging/gaming giant Tencent (OTCPK:TCEHY), and #2 Chinese e-commerce firm JD.com (JD +1.8%) are each investing $50M in leading Chinese online auto platform Bitauto (BITA +12%). Bitauto is also selling $150M worth of convertible bonds to investment firm PAG.
• Baidu, Tencent, and JD are each buying 2.47M Bitauto shares at $20.23 apiece ($0.23 below Friday's close). The deal follows JD and Tencent's $1.55B 2015 investment in the company, and respectively leaves JD, Tencent, and Baidu holding 23.5%, 7.1%, and 3.2% stakes.
• The bonds are due five years from issuance, and carry a 2% interest rate and $23.67/share conversion price. Owners of the convertible debt will hold an 8.2% stake. Bitauto chairman/CEO William Li will be buying a portion of the debt through PAG, by means of a total return swap agreement.
• Bitauto is up sharply. Rival Autohome (ATHM +3.2%) is posting moderate gains. Li: "Through our new partnership with Baidu, we expect to leverage its leadership in mobile and desktop online search, big data and transaction services platforms for additional strategic advantages as we continue to create the industry leading new and used car purchasing experience for customers in China."