According to the proposal letter, the Consortium intends to fund the consideration payable in the Transaction with a combination of equity and debt capital. A copy of the proposal letter is attached as Annex A to this press release.
The Board is reviewing and evaluating the proposal. The Company expects that the Board will adopt various procedures and protocols designed to evaluate the proposal and safeguard the interest of the Company’s shareholders that are unaffiliated with the Consortium.
The Company cautions its shareholders and others considering trading in its securities that the Board only recently received the non-binding proposal letter from the Consortium and no decisions have been made with respect to the Company's response to the proposal. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.
Safe Harbor Statement
This press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates" and similar statements. Among other things,
For investor and media inquiries, please contact:
Non-binding Proposal to
The Board of Directors
10th Floor Tower B,
Dan Ling Street
Ladies and gentleman:
We believe that our proposal provides a very attractive opportunity to the Company’s shareholders. Our proposal represents a premium of 12.1% to the volume-weighted average price during the last 30 trading days and a premium of 20.7% to the volume-weighted average price during the last 60 trading days.
- Consortium. The Consortium Members will form an acquisition company for the purpose of implementing the Acquisition, and Consortium Members have agreed to work together exclusively in pursuing the Acquisition.
- Purchase Price. We propose to acquire all of the outstanding Class A ordinary shares (including Class A ordinary shares represented by ADSs) and Class B ordinary shares of the Company (in each case other than those held by the Consortium Members that may be rolled over in connection with the Acquisition) at a purchase price in cash equal to
$31.50per Class A common share, $31.50per Class B common share and $31.50per ADS.
- Funding. We intend to finance the Acquisition with a combination of equity and debt capital. Equity financing would be provided by Boyu, Hillhouse, Sequoia and any additional equity investors admitted to the Consortium, and we expect definitive commitments by financial institutions for the required debt to be in place when the Definitive Agreements (as defined below) are signed.
- Due Diligence. We have engaged
Wilson Sonsini Goodrich & Rosatiand Weil, Gotshal & Manges LLPas U.S. and Hong Konglegal counsel to the Consortium. We believe that we will be in a position to complete customary legal, financial and accounting due diligence for the Acquisition in a timely manner with the full cooperation of the Company, and in parallel with discussions on the Definitive Agreements (as defined below).
- Definitive Agreements. We are prepared to promptly negotiate and finalize definitive agreements (the “Definitive Agreements”) providing for the Acquisition and related transactions. These documents will provide for representations, warranties, covenants and conditions which are typical, customary and appropriate for transactions of this type.
- Process. We believe that the Acquisition will provide superior value to the Company’s shareholders. We recognize that the Company’s Board of Directors (the “Board”) will evaluate the Acquisition independently before it can make its determination to endorse it. Given the involvement of the CEO in the Acquisition, we appreciate that the independent members of the Board will proceed to consider the proposed Acquisition.
In considering our offer, you should be aware that the Consortium Members are interested only in acquiring the outstanding shares of the Company that the Consortium Members do not already own, and that the Consortium Members do not intend to sell their stake in the Company to any third party.
- Confidentiality. We expect the Company to make a public announcement in connection with receiving our proposal. However, we are sure you will agree with us that it is in all of our interests to ensure that we otherwise proceed in a strictly confidential manner, unless otherwise required by law, until we have executed Definitive Agreements or terminated our discussions.
- About the Consortium Members.
Boyu Capital. Boyu Capitalis a leading private investment firm with over US$5 billionequity capital commitments and offices in Hong Kongand Beijing. Founded in 2011 by a team of experienced investors and business operators, Boyu provides growth and transformational capital and strategic support for its portfolio companies through long-term partnerships with management teams. With a strong focus in healthcare, media and technology, financial services and consumer/retail industries, Boyu has become the partner of choice by many industry leaders in China.
Hillhouse Capital. Hillhouse Capitalis one of the largest and best performing investment platforms in Asia. Hillhouse invests with a long-term time horizon and employs a fundamental, bottom-up approach. Independent proprietary research is key to Hillhouse’s investment process. Hillhouse team focuses on the consumer, TMT, industrials and healthcare sectors and invests in companies across all equity stages. Hillhouse manages capital for institutional clients such as university endowments, foundations, sovereign wealth funds, pensions and family offices.
About Sequoia. Sequoia is an international private equity and investment firm. Since its inception in
September 2005, Sequoia China funds has initiated and managed numerous U.S. dollar and RMB funds, and has become one of China’s most successful venture capital and private equity funds.
- No Binding Commitment. This letter constitutes only a preliminary indication of our interest, and does not constitute any binding commitment with respect to the Acquisition. A binding commitment will result only from the execution of Definitive Agreements, and then will be on terms and conditions provided in such documentation.
- Governing Law. This letter shall be governed by, and construed in accordance with, the internal laws of the
State of New York.
In closing, we would like to express our commitment to working together to bring this Acquisition to a successful and timely conclusion. Should you have any questions regarding this proposal, please do not hesitate to contact us. We look forward to hearing from you.
BOYU CAPITAL ADVISORY CO. LTD
HILLHOUSE TBC HOLDINGS L.P.
Title: Director of its general partner,
SEQUOIA CHINA INVESTMENT MANAGEMENT LLP
Title: Executive Partner