Zhihu Inc. Announces Results of the Extraordinary General Meeting and Satisfaction of the Condition of the Tender Offers

Rhea-AI Summary

Zhihu Inc. (NYSE: ZH; HKEX: 2390), a leading online content community in China, has announced that the proposed ordinary resolution for the all-cash tender offers has been adopted at the extraordinary general meeting held in Beijing on October 16, 2024. The tender offers aim to buy back up to 46,921,448 Class A ordinary shares (including ADSs) at an offer price of HK$9.11 per Class A ordinary share (equivalent to US$3.50 per ADS).

The offers have now become unconditional and will remain open for acceptance until 4:00 p.m., Hong Kong time, or 4:00 a.m., New York City time, on Wednesday, October 30, 2024. Beneficial owners of ADSs or Class A ordinary shares held through nominees are advised to contact their brokers or other intermediaries as soon as possible to ensure timely participation in the offers.

Positive

• Successful adoption of the tender offer resolution at the extraordinary general meeting
• Tender offers became unconditional, allowing for the buyback of up to 46,921,448 Class A ordinary shares
• Offer price of HK$9.11 per Class A ordinary share (US$3.50 per ADS) provides shareholders with a cash return opportunity

Negative

• Potential reduction in the company's cash reserves due to the share buyback
• Possible decrease in the number of outstanding shares, which may affect liquidity

Insights

Financial Analyst

The announcement of Zhihu's successful shareholder approval for the tender offer is a significant financial event. The company is offering to buy back up to 46,921,448 Class A ordinary shares at HK$9.11 per share (equivalent to US$3.50 per ADS). This represents a substantial capital allocation decision, potentially impacting Zhihu's financial structure and shareholder value.

The tender offer, now unconditional, could lead to:

• Reduced share count, potentially increasing earnings per share
• Improved capital efficiency
• A signal of management's confidence in the company's valuation

However, investors should consider the cash outflow and its impact on Zhihu's balance sheet. With a market cap of $356,726,707, this buyback is sizeable. The offer's success rate and participation level will be important to watch, as it will determine the actual financial impact on the company.

Market Research Analyst

This tender offer by Zhihu is a strategic move that could significantly impact its market position. As a leading online content community in China, Zhihu's decision to repurchase shares may indicate:

• Management's belief that the stock is undervalued
• A strategy to consolidate ownership and potentially increase control
• An effort to boost investor confidence in a challenging market environment

The offer price of HK$9.11 per Class A ordinary share provides a clear valuation benchmark. Investors should compare this to recent trading prices and consider the premium offered. The market's reaction to this news, both in terms of stock price movement and participation in the tender offer, will be telling. It's important to monitor how this move affects Zhihu's competitive position in China's dynamic online content landscape and its attractiveness to both retail and institutional investors.

BEIJING, Oct. 16, 2024 /PRNewswire/ -- Zhihu Inc. (NYSE: ZH; HKEX: 2390) ("Zhihu" or the "Company"), a leading online content community in China, today announced that the proposed ordinary resolution relating to the all cash tender offers (the "Offers") that commenced on September 9, 2024 to buy back up to 46,921,448 Class A ordinary shares of the Company (including in the form of American depositary shares (the "ADSs")) at an offer price of HK$9.11 per Class A ordinary share (equivalent of US$3.50 per ADS) submitted for shareholders' approval (the "Proposed Resolution") as set forth in the notice of extraordinary general meeting dated September 9, 2024 has been duly adopted at the extraordinary general meeting held in Beijing, China today.

After the adoption of the Proposed Resolution on October 16, 2024, the Offers have become unconditional. The Offers will remain open for acceptance until 4:00 p.m., Hong Kong time, or 4:00 a.m., New York City time, on Wednesday, October 30, 2024 (the "Latest Acceptance Time"). Beneficial owners of ADSs or Class A ordinary shares held through any broker, dealer, commercial bank, trust company, or other nominee should be aware that they may require advance notification before the Latest Acceptance Time in order to be able to tender their ADSs or Class A ordinary shares before the Offers expire. Accordingly, such beneficial owners of ADSs or Class A ordinary shares wishing to participate in the Offers should contact their broker, dealer, commercial bank, trust company, or other nominee as soon as possible in order to determine the times by which such beneficial owners must take action in order to duly participate in the Offers.

Certain Information Regarding the U.S. Offer

This press release is for information only and is not an offer to purchase, a solicitation of an offer to purchase, or a solicitation of an offer to sell any securities of the Company. The U.S. Offer will be made only pursuant to, and ADS holders and U.S. shareholders may only tender in the U.S. Offer in accordance with, the U.S. Offer to Purchase and other related materials.

ADS HOLDERS AND U.S. SHAREHOLDERS ARE URGED TO READ THE COMPANY'S SCHEDULE TO, U.S. OFFER TO PURCHASE, AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ZHIHU INC. AND THE U.S. OFFER.

Materials filed with the SEC are available electronically without charge at the SEC's website, https://www.sec.gov. Documents filed with the SEC may also be obtained without charge at the Company's website, https://ir.zhihu.com. ADS holders and U.S. shareholders are also able to obtain a copy of these documents, without charge, from Broadridge Corporate Issuer Solutions, LLC, the information agent for the U.S. Offer.

About Zhihu Inc.

Zhihu Inc. (NYSE: ZH; HKEX: 2390) is a leading online content community in China where people come to find solutions, make decisions, seek inspiration, and have fun. Since the initial launch in 2010, we have grown from a Q&A community into one of the top comprehensive online content communities and the largest Q&A-inspired online content community in China. For more information, please visit https://ir.zhihu.com. 

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC and the Hong Kong Stock Exchange. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

For investor and media inquiries, please contact:

In China:

Zhihu Inc.
Email: ir@zhihu.com

Piacente Financial Communications
Helen Wu
Tel: +86-10-6508-0677
Email: zhihu@tpg-ir.com 

In the United States:

Piacente Financial Communications
Brandi Piacente
Phone: +1-212-481-2050
Email: zhihu@tpg-ir.com

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SOURCE Zhihu Inc.

FAQ

What is the offer price for Zhihu's (ZH) tender offer?

The offer price for Zhihu's tender offer is HK$9.11 per Class A ordinary share, which is equivalent to US$3.50 per ADS.

When does Zhihu's (ZH) tender offer expire?

Zhihu's tender offer expires at 4:00 p.m., Hong Kong time, or 4:00 a.m., New York City time, on Wednesday, October 30, 2024.

How many shares is Zhihu (ZH) looking to buy back in its tender offer?

Zhihu is looking to buy back up to 46,921,448 Class A ordinary shares, including shares in the form of American depositary shares (ADSs).

When was the extraordinary general meeting held for Zhihu's (ZH) tender offer?

The extraordinary general meeting for Zhihu's tender offer was held in Beijing on October 16, 2024.