Zeekr Intelligent Technology, a Chinese manufacturer specializing in luxury electric vehicles, is transitioning to private ownership following an acquisition agreement with Geely Automobile earlier this year. This move by Geely, which already holds a significant 62.5% of Zeekr's voting rights, offers a 25.6% premium on the ADS price at $26.87. While this represents a premium, analysis suggests that the acquisition price falls below the long-term fair value of Zeekr, potentially limiting future growth prospects for existing shareholders.
Considering Geely's majority voting power, minority shareholders face an uphill battle in attempting to contest the transaction. Given the prevailing market conditions and the restricted potential for upward movement in Zeekr's stock price post-acquisition, divesting Zeekr shares is advisable. The stock's future performance is expected to closely mirror that of Geely's, making an independent growth trajectory unlikely for Zeekr as a standalone entity.
This strategic maneuver highlights the dynamics of corporate control and shareholder value in a rapidly evolving market. For investors, it underscores the importance of evaluating acquisition offers not just on immediate premiums but also on long-term growth potential and the strategic implications of majority ownership. The decision to sell Zeekr shares now could allow investors to reallocate capital to opportunities with clearer independent growth trajectories, reflecting a prudent approach in navigating corporate restructuring.