Smart Share Global's Going-Private Merger: A Strategic Exit for Shareholders?

In the ever-evolving landscape of corporate governance and shareholder value, the decision to take a public company private is rarely made lightly. For Smart Share Global Limited (Nasdaq: EM), a Chinese mobile device charging services provider, the recent $327 million merger agreement represents both a strategic realignment and a compelling financial opportunity for shareholders. This article evaluates the rationale behind the transaction, the premium offered, the funding structure, and the long-term implications of delisting, arguing that this merger is a favorable exit for public shareholders.

Premium Analysis: A Compelling Offer for Shareholders

The merger terms offer a cash consideration of $1.25 per American Depository Share (ADS) and $0.625 per ordinary share. This represents a 74.8% premium over the closing price on January 3, 2025, the last trading day before the going-private proposal was announced. Additionally, the price is 8.7% higher than the July 31, 2025, closing price, just days before the merger's public announcement. These figures are significant, especially when compared to the company's recent financial performance.

Smart Share's Q2 2025 financials reveal a 20% decline in revenue compared to the previous quarter, driven by a shift in business model and operational adjustments. While the company maintains a strong cash position (RMB3.0 billion, or ~$432 million), its profitability has weakened, with a net income of RMB4.2 million in Q2 2025, down from RMB49.0 million in Q3 2023. The premium offered by the consortium reflects a belief that the company's intrinsic value is higher than its current market price, particularly given its dominant position in China's shared power bank market.

Funding Structure: A Conservative and Diversified Approach

The merger is being funded by a consortium led by Trustar Mobile Charging Holdings Limited and key Smart Share executives, including CEO Mars Cai and CFO Maria Xin. The consortium holds 64% of the voting rights, significantly increasing the likelihood of shareholder approval. The funding strategy combines cash contributions from consortium members, a $200 million term loan from Bank of China, and equity rollovers from existing shareholders. This diversified approach reduces the risk of liquidity constraints and aligns the consortium's interests with long-term value creation.

Critically, the absence of new debt issuance (Smart Share's debt-to-equity ratio is 0.25%) ensures that the company's financial flexibility remains intact. The merger's cash-out structure also avoids dilution for public shareholders, preserving their immediate gains without exposing them to the volatility of a potentially underperforming stock.

Regulatory Pathway: Clear and Compliant

The merger requires approval at an extraordinary general meeting, with at least two-thirds of votes cast in favor. Given the consortium's 64% ownership, this threshold is likely to be met. Regulatory filings, including a proxy statement and Schedule 13E-3 Transaction Statement, will be submitted to the SEC, ensuring transparency for shareholders. The involvement of top-tier legal advisors—such as Skadden Arps (U.S.), Maples and Calder (Hong Kong), and Haiwen & Partners (PRC)—further reinforces the transaction's legitimacy.

The merger also addresses Nasdaq's minimum bid price compliance, which Smart Share recently regained. By delisting, the company avoids the ongoing costs of public reporting and potential future compliance risks, such as restatements or governance scrutiny.

Long-Term Value Implications of Delisting

Delisting offers Smart Share Global a strategic advantage: operational flexibility. As a private entity, the company can focus on long-term investments in its network partner model, which now accounts for 96.8% of its points of interest. This shift has already led to cost efficiencies, with 9.5 million power banks deployed across 1,274 thousand locations.

Public markets often prioritize short-term earnings over innovation, but private ownership allows Smart Share to pursue high-growth initiatives without quarterly reporting pressures. For example, the company could expand into adjacent services, such as solar-powered charging or AI-driven user analytics, without facing shareholder skepticism about near-term ROI.

However, delisting is not without risks. Private companies typically have less access to capital, and the consortium's ability to fund future growth will depend on internal cash flows. That said, Smart Share's $432 million cash reserves provide a buffer, and the merger's premium ensures shareholders receive immediate liquidity rather than waiting for uncertain future gains.

A Favorable Exit for Shareholders

For public shareholders, the merger represents a risk-rebalanced opportunity. The premium offered is among the highest seen in recent going-private transactions, and the consortium's ownership stake ensures alignment with long-term success. While the company's profitability has declined, its strong cash position and strategic pivot to a network partner model suggest that the consortium sees untapped potential.

Investors who have held Smart Share through its recent challenges—such as declining revenue and weak operating margins—may view this as a prudent exit. The merger's $1.25/ADS price offers a 74.8% premium to a price that was already depressed by operational headwinds. In contrast, holding the stock carries the risk of further declines if the company's transition to a network partner model fails to deliver results.

Conclusion: Strategic Realignment with Shareholder-Centric Outcomes

Smart Share Global's going-private merger is a well-structured transaction that balances strategic flexibility with financial prudence. The premium offered, conservative funding approach, and clear regulatory pathway make it a compelling case for shareholder approval. While the decision to delist removes the company from public market oversight, it also liberates it to pursue long-term value creation without the constraints of quarterly earnings expectations.

For shareholders, this merger is not just a cash-out—it's a vote of confidence in the company's ability to thrive in a private environment. In a market where public companies often trade at discounts to their intrinsic value, this transaction serves as a reminder that strategic exits can be mutually beneficial for all stakeholders.