On October 14, 2025, Nasdaq-listed Smart Share Global Ltd (EM.O) became the center of attention again due to a privatization controversy characterized by an "embracing lower bids." The company's board officially rejected Hillhouse Capital's buyout offer of $1.77 per ADS, opting instead to advance a privatization plan with a consortium formed by Xincheng Capital and the management at the lower price of $1.25 per ADS. This decision not only raised concerns among minority shareholders regarding the protection of their rights but also reflected the dual challenges of stagnation and strategic transformation plaguing the shared power bank industry.

Hillhouse's 40% premium offer rejected as management's "low-price alliance" reveals control ambitions According to a 13E3 filing submitted by Smart Share to the U.S. Securities and Exchange Commission (SEC), the board of Smart Share has formally rejected Hillhouse Capital's premium privatization offer of $1.77 per ADS proposed in August and will continue to adhere to the previously established $1.25 per ADS privatization plan with Xincheng Capital and management. The underlying logic behind this decision may rest on the management's steadfast control ambitions. Smart Share employs an AB share structure, and by the end of 2024, although management holds only 18.7% of shares, they possess 64.5% of voting rights, while Hillhouse Capital's voting rights amount to just 5.3%.

Financial Crisis Amidst Industry Winter: Revenue Plummets 36%, Gross Margin Halved Smart Share's financial performance has already raised red flags. In 2024, revenue plummeted 36% from 2.959 billion yuan in 2023 to 1.894 billion yuan; net profit turned into a loss of 14 million yuan. Even more concerning, the company's gross margin has steadily decreased from 80.38% in 2020 to 42.59% in 2024, reflecting the dual pressures of a price war and rising costs within the industry.

Shareholder Rights Controversy: Does Low-Price Privatization Harm Minority Investors? Smart Share's decision has sparked market concerns regarding the protection of minority shareholders' rights. According to the 2024 annual report, each ADS of Smart Share has approximately $1.63 in cash asset value, while the privatization offer from Xincheng and management's consortium is only $1.25, even below the company's available cash value. Furthermore, the $1.25 offer from Xincheng and the management consortium not only falls short of the company's cash asset value but also represents an 85% decline compared to the initial public offering price of $8.50. As of October 16, 2025, the company's stock price remains above $1.30, yet it is still significantly lower than both the IPO price and cash value.

Industry's Ultimate Dilemma: Is Shared Power Bank a "False Demand" or a "Traffic Gold Mine"? The privatization controversy surrounding Smart Share essentially poses the ultimate question regarding the sustainability of the shared power bank industry's business model. With rental prices moving away from the "1 yuan/hour" era, and while the user base has exceeded 500 million, facing a halved gross margin, has this sector reached its ceiling? So far, the board of Smart Share has not disclosed the detailed assessment process behind the rejection of Hillhouse's offer. The market is closely watching whether they will issue an independent fairness opinion to protect minority shareholder rights. This tussle over control and valuation may merely be the first tremor in the winter of the sharing economy.

Note: This article combines AI-generated content, and the views expressed herein do not constitute investment advice and are for reference only. The market carries risks, and investments should be made with caution.