Geely Automobile Holdings is facing mounting pressure from early investors in its premium electric vehicle unit Zeekr, who argue the company’s $2.2 billion privatization proposal significantly undervalues the fast-growing EV brand, according to sources cited by Reuters.
Five cornerstone investors—battery giant CATL, Intel Capital, Boyu Capital and two others—have submitted joint letters to Zeekr’s board and its newly formed special committee, expressing dissatisfaction with the proposed buyout. The investors, who participated in Zeekr’s initial $500 million external fundraising round in 2021, said the $6.5 billion valuation implied by Geely’s offer falls short of fair value when compared with peers such as Li Auto, Nio and Xpeng.
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The group argues Zeekr has stronger cash flow and profit outlooks than many of its competitors, and called for any privatization deal to be contingent on approval from a majority of independent minority shareholders, the report said. A second letter sent this week reiterated their stance and urged the special committee to conduct a thorough evaluation of the proposed transaction.
The investors had taken a 6 percent stake in Zeekr at a valuation of $9 billion in 2021. A follow-up funding round pushed that valuation to $13 billion in 2023, but Zeekr’s market cap had fallen to just $5.5 billion by the time of its recent initial public offering on the New York Stock Exchange.
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In a sign of broader concern, two sources told Reuters that Y2 Capital—an investor in Zeekr’s IPO—also submitted a letter to Geely expressing similar reservations about the proposed privatization. Despite investor pushback, analysts note Geely’s 65.7 percent ownership stake in Zeekr gives it substantial voting power, potentially allowing the company to move forward with delisting even without broader shareholder approval.
Geely announced its non-binding offer on May 7, proposing to acquire all outstanding Zeekr shares at $2.57 per share or $25.66 per American Depositary Share (ADS), representing a 13.6 percent premium over the May 6 closing price. If successful, the transaction would see Zeekr delist from the NYSE and return to full ownership under Geely.
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While the proposed premium may offer a short-term boost, minority investors argue the offer fails to reflect Zeekr’s long-term potential and past valuations. The growing dissent highlights the increasingly complex dynamics surrounding privatization efforts in China’s competitive EV market.