Sina Enters into Definitive Agreement for "Going Private" Transaction
Sina, 9/28/20
Chinese online media company Sina (Nasdaq: SINA) today announced that it has entered into an Agreement and Plan of Merger (the "Merger Agreement") with New Wave Holdings Limited ("Parent") and New Wave Mergersub Limited, a wholly owned subsidiary of Parent, pursuant to which Parent will acquire all of the Company's outstanding ordinary shares (each, an "Ordinary Share") not currently owned by Parent and its affiliates in an all-cash transaction (the "Merger") implying an equity value of the Company of approximately USD 2.59 billion for all the Ordinary Shares. Parent is a wholly owned subsidiary of New Wave MMXV Limited ("New Wave"), a British Virgin Islands company controlled by Mr. Charles Chao, Chairman and Chief Executive Officer of the Company (the "Chairman").
Pursuant to the Merger Agreement, at the effective time of the Merger (the "Effective Time"), each Ordinary Share issued and outstanding immediately prior to the Effective Time will be cancelled and cease to exist in exchange for the right to receive USD 43.30 in cash per Ordinary Share without interest (the "Per Share Merger Consideration" and in the aggregate, the "Merger Consideration"), other than (a) shares held by the Chairman, New Wave and any of their respective affiliates, which will be rolled over in the transaction, (b) shares held by the Company or any subsidiary of the Company or held in the Company's treasury, which will be cancelled and cease to exist without payment of any consideration, and (c) shares held by shareholders who have validly exercised and not effectively withdrawn or lost their rights to dissent from the Merger pursuant to Section 238 of the Companies Law of the Cayman Islands, which will be cancelled and cease to exist in exchange for the right to receive the payment of fair value of those dissenting shares in accordance with Section 238 of the Companies Law of the Cayman Islands.
The Per Share Merger Consideration represents a premium of approximately 18.1% to the closing price of the Company's Ordinary Shares on July 2, 2020, the last trading day prior to the Company's announcement of its receipt of the preliminary non-binding "going-private" proposal from New Wave on July 6, 2020, and premiums of approximately 23.6% and 28.6% to the volume-weighted average traded price of the Company's Ordinary Shares during the last one month and three months, respectively, prior to and including July 2, 2020.
The Per Share Merger Consideration also represents an increase of approximately 5.6% over the USD 41 per Ordinary Share initially offered in the "going-private" proposal from New Wave.
The Merger Consideration will be funded through a combination of certain committed term loan facilities obtained by New Wave from China Minsheng Banking Corp., Ltd. and cash contribution by the Chairman and New Wave.
The Company's board of directors, acting upon the unanimous recommendation of a committee of independent directors established by the Board (the "Special Committee"), approved the Merger Agreement and the Merger, and resolved to recommend that the Company's shareholders vote to authorize and approve the Merger Agreement and the Merger. The Special Committee negotiated the terms of the Merger Agreement with the assistance of its financial and legal advisors.
The Merger is currently expected to close during the first quarter of 2021 and is subject to customary closing conditions, including the approval of the Merger Agreement by the affirmative vote of shareholders representing at least two-thirds of the voting power of the outstanding shares of the Company present and voting in person or by proxy at a meeting of the Company's shareholders. The Chairman and New Wave have agreed to vote all Ordinary Shares and Class A preference shares of the Company they beneficially own, which represent approximately 61% of the voting rights attached to the outstanding shares of the Company as of the date of the Merger Agreement, in favor of the authorization and approval of the Merger Agreement and the Merger. If completed, the Merger will result in the Company becoming a privately held company and its Ordinary Shares will no longer be listed on the Nasdaq Global Select Market.
Keywords: delist microblogging Charles Chao Internet online media Sina M&A
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