Luckin Coffee Founder to Sell Stake in Car Rental Unit to SAIC
What’s New: SAIC Motor Corp. Ltd., China’s largest automaker, agreed to pay as much as HK$1.9 billion ($254 million) for 28.92% of leading car rental services provider Car Inc.
The deal would provide an exit for Lu Zhenyao, the founder of scandal-plagued Luckin Coffee Inc. and the former controlling shareholder of Car Inc.
Hong Kong-listed Car Inc. disclosed the deal late Thursday in a filing with the Hong Kong stock exchange. Under the deal, SAIC will purchase the shares from Car Inc. shareholders Ucar Inc. and U.S. private equity giant Warburg Pincus. Ucar Inc. is a limousine services provider controlled by Lu.
The offer represents a 33% premium over Car Inc.’s trading price Wednesday. After the transaction, SAIC will become the largest shareholder of Car Inc.
Background: The deal was a surprise as Car Inc. said last month that SAIC’s smaller rival Beijing Automotive Group Co. Ltd. (BAIC) was in talks about a potential equity purchase.
A person close to the matter said SAIC won out as BAIC has yet to complete a due diligence review of Car Inc. and offer a price.
If the deal is completed, Ucar Inc. will withdraw from Car Inc., ending Car Inc.’s financial relationship with Lu, whose affairs have been rattled by the financial reporting fraud of Luckin Coffee.
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