Bitauto's Non-Binding Proposal Offers A Possible Arbitrage

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About: Bitauto Holdings Limited (BITA)
by: Anthony H. Steinmetz
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Anthony H. Steinmetz
Value, special situations, arbitrage
Summary

BITA received a non-binding proposal to take the company private for $16 per ADS.

Arbitrage spread currently sits around 6.5 percent.

Spread will shrink rapidly if a definitive merger agreement is reached between the company and the acquirer.

On September 13, Bitauto Holdings Limited (BITA) received a non-binding proposal from Tencent Holdings Limited (OTCPK:TCEHY) and Hammer Capital (together, "Buyer Consortium" or "Consortium") offering to purchase all outstanding shares not