Feihe International, Inc.
ADY ("Feihe", the "Company", "we", "us" and "our"), one of
the leading producers and distributors of premium infant formula,
milk powder and soybean, rice and walnut products in China, today
announced that it has entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Diamond Infant Formula Holding Limited,
a Cayman Islands exempted company ("Holdco"), Platinum Infant Formula
Holding Limited, a Cayman Islands exempted company and a wholly owned
subsidiary of Holdco ("Parent"), and Infant Formula Merger Sub
Holding Inc., a Utah corporation and a wholly owned subsidiary of
Parent ("Merger Sub"), pursuant to which Parent will acquire the
Company for US$7.40 per share of the Company's common stock without
interest (the "Merger Consideration"). The Merger Consideration
represents a 21.3% premium over the closing price of US$6.10 per
share of Company common stock as quoted by the New York Stock Exchange on October 2, 2012, and a 23.5% premium to the
volume-weighted average price of the Company's common stock during
the 30 trading days prior to October 2, 2012, the last trading day
prior to the Company's announcement on October 3, 2012 that it had
received a "going private" proposal from Mr. You-Bin Leng, the
Company's Chairman and Chief Executive Officer, and an affiliate of
Morgan Stanley Private Equity Asia. The Merger Consideration implies
an equity value of the Company of approximately US$147 million, on a
fully diluted basis.
Pursuant to the terms and subject to the conditions of the Merger
Agreement, Merger Sub will merge with and into the Company with the
Company surviving the merger and becoming a wholly-owned subsidiary
of Parent and a wholly-owned indirect subsidiary of Holdco (the
"Merger"). In connection with and at the effective time of the
Merger, each share of the Company's common stock that is outstanding
immediately prior to the effective time of the Merger will be
cancelled in consideration for the right to receive US$7.40 in cash without interest (the "Merger Consideration"), except for (a) shares
of the Company's common stock (including shares issuable upon the
exercise of vested options) currently beneficially owned by Mr.
You-Bin Leng, the Company's Chairman and Chief Executive Officer, Mr.
Hua Liu, the Company's Vice Chairman and Chief Financial Officer, and
Mr. Sheng-Hui Liu, a director of the Company and vice president of
one of the Company's subsidiaries (collectively, the "Rollover
Holders", and the shares of the Company's common stock beneficially
owned by the Rollover Holders, the "Rollover Shares), which will be
cancelled for no consideration at the effective time of the Merger,
and (b) shares of the Company's common stock owned by shareholders
who have exercised and not effectively withdrawn or lost the right of
dissent in accordance with applicable Utah law, which shares will be
cancelled at the effective time of the Merger and will entitle the
former holders thereof to receive the appraised value thereon in
accordance with applicable Utah law.
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