Bilibili (09626) fell 2.7% to HK$118.1 after announcing a $700 million offering of convertible senior notes, according to ETNet.

The initial conversion price is about HK$155.79 per share, a premium of about 28.3% to Friday's close of HK$121.4. Tencent (00700), a shareholder, subscribed to $200 million of the notes, while another $500 million was sold to other initial purchasers at 98.35% of principal.

Bilibili expects net proceeds of about $690 million, or about HK$5.41 billion. It plans to use about $100 million to hedge and repurchase about 6.796 million Z-class ordinary shares, equal to about 1.6% of its issued shares, at a reference price of HK$115.38 per share, about 5% below Friday's close.

Tencent will also sell about 9.6% of its Bilibili stake through shares sold for the buyback and a secondary placement. After the repurchase and note sale are completed, Tencent's holdings will fall from about 40.014 million Z-class ordinary shares to 48,000 shares.

Bilibili said the remaining proceeds will fund AI-driven business growth, including stronger AI capabilities in content understanding, recommendation and creation, as well as higher user engagement, productivity and efficiency, and general corporate purposes.