Baidu finalizes $2 billion exchangeable bond offering

BEIJING - Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888 (HKD Counter) and 89888 (RMB Counter)), a prominent AI and Internet company with a market capitalization of $33.1 billion and strong financial health metrics according to InvestingPro, announced today the completion of its $2 billion exchangeable bond offering due March 12, 2032. Analysis from InvestingPro suggests the stock is currently trading below its Fair Value, making it one of the potentially undervalued opportunities in the tech sector. The offering involved the sale of bonds in offshore transactions to certain non-U.S. persons under Regulation S of the Securities Act.

The bonds, which do not bear regular interest and whose principal will not accrete, have a ten-year term, maturing on March 12, 2032, unless repurchased, redeemed, or exchanged sooner. The initial exchange ratio is set at 1,107.0457 Trip.com Shares per $100,000 principal amount of bonds, equivalent to approximately HK$702.13 per share, a 43% premium over the delta placement price of HK$491.00 per Trip.com Share. With a healthy current ratio of 2.09 and strong cash position, Baidu maintains robust financial flexibility for such strategic initiatives.

Baidu plans to allocate the net proceeds from the bond offering towards repaying certain existing debts, covering interest payments, and for general corporate purposes. The company’s solid financial position is reflected in its impressive P/E ratio of 9.96 and positive earnings yield of 10%. For deeper insights into Baidu’s financial metrics and growth potential, investors can access additional analysis through InvestingPro, which offers exclusive financial health scores and valuation metrics. The bonds, which are not registered under the U.S. Securities Act or any state securities laws, are restricted from being offered or sold in the U.S. or to U.S. persons, except under specific exemptions.

Furthermore, the company has secured approval for the bonds to be listed on the Frankfurt Stock Exchange, and they have commenced trading on its Open Market segment. With a gross profit margin of 50.35% and stable revenue of $18.2 billion in the last twelve months, Baidu continues to demonstrate strong operational performance.

This announcement does not constitute an offer to sell or a solicitation to buy any securities in the U.S. or elsewhere, nor does it constitute an offer, solicitation, or sale in any jurisdiction where such actions would be unlawful.

Baidu, founded in 2000 with the mission of simplifying the complex world through technology, trades on the Nasdaq and the Hong Kong Stock Exchange. This press release statement contains forward-looking statements under the U.S. Private Securities Litigation Reform Act of 1995, and the company does not assume any obligation to update these statements as per applicable law.

In other recent news, Baidu has priced a $2 billion exchangeable bond offering, with the transaction expected to close in March 2025. The bonds, maturing in 2032, are linked to Trip.com Group Limited shares and will be listed on the Frankfurt Stock Exchange. The proceeds are intended for repaying existing debts and general corporate purposes. Additionally, Baidu completed a $2.1 billion acquisition of YY Live, a live streaming business, marking a strategic expansion in this growing sector. The acquisition involved releasing $1.6 billion previously held in escrow, which Baidu plans to use to enhance its cloud and AI infrastructure. These developments highlight Baidu’s ongoing growth strategies and investment in its technological capabilities. The company has not committed to updating forward-looking statements, which are subject to risks and uncertainties.

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