Tencent and Hammer Capital offered on Thursday a non-binding buyout proposal to buy all shares not already owned by the Chinese online automotive platform Bitauto, according to a Bitauto press release.

The offer of USD 16 in a private transaction for every American depositary share from social media and gaming magnate Tencent came at a premium of 16.4% over Bitauto’s Thursday closing price, and on a premium of 36.1% to the volume-weighted average closing price during the last 30 trading days.

Tencent owns a 7.81% stake in Bitauto, while Chinese e-commerce giant JD.com is the largest shareholder with 25% of shares. Hammer Capital doesn’t currently own any stake in the company.

In an internal letter obtained by 36Kr, Bitauto’s CEO Andy Zhang said that “If the deal will be completed, the now NYSE-listed Bitauto would go private. Tencent’s move got full supports from large shareholders including William Li (Bitauto’s cofounder and EV maker Nio CEO), JD.com and AutoTrader Group.”

Tencent’s proposal is considered to be part of its expansion plans in the automobile finance and transaction industry, which is the core business of Hong Kong-traded Yixin, a spinoff firm of Bitauto. Tencent’s deal with Bitauto will strengthen its control over Yixin, as Bitauto currently owns a 43.7% stake and controls 53.6% of the voting rights in Yixin.

Founded in 2000, Bitauto is a provider of automotive-centered internet content, marketing and transaction services. It went public in 2010 at a market capitalization of around USD 1 billion. Its main competitor in China is Autohome, an NYSE-listed automotive-centric portal.

In the second quarter of this year, Biteauto reported a net loss of USD 21.2 million, with a staggering 5400% year-on-year decline from last year’s net income of USD 0.4 million. By contrast, its rival Autohome’s net income had a 16% increase, up to USD 116.8 million.

Li, Bitauto’s cofounder with an 11% stake in the company, may get as much as USD 124 million from the deal, although he said he would still keep some shares when contacted by 36Kr.

The fresh capital will plausibly be injected in Nio, the Shanghai-based EV manufacturer who has been undergoing a troubled time with disappointing financial and sales performances this year, market watchers said.

36Kr is KrASIA’s parent company.