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Exceed Holders Cheer as Co. Announces Go-Private Transaction at $1.78/Share

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Exceed Company Ltd. (NASDAQ: EDS) ("Exceed" or the "Company"), one of the leading domestic sportswear brands in China, today announced that it has entered into a definitive Agreement and Plan of Merger (the "Merger Agreement") with Pan Long Company Limited ("Parent"), an exempted company with limited liability incorporated under the laws of the Cayman Islands and wholly owned by Mr. Shuipan Lin ("Mr. Lin"), the Company's Chairman and Chief Executive Officer, and Pan Long Investment Holdings Limited ("Merger Sub"), a business company with limited liability incorporated under the laws of the British Virgin Islands ("BVI") and a wholly owned subsidiary of Parent, pursuant to which Parent will acquire the Company for US$1.78 per ordinary share of the Company (a "Share").  This represents a 19.5% premium over the closing price of US$1.49 on August 16, 2013, the last trading day prior to the Company's announcement on August 19, 2013 that it had received a "going private" proposal, and a 24.4% premium over the volume-weighted average closing price of the Company's Shares during the 30 trading days prior to August 16, 2013.  The consideration to be paid to holders of Shares implies an equity value for the Company of approximately US$60.1 million, on a fully diluted basis.

Upon consummation of the transactions contemplated under the Merger Agreement, Parent will be beneficially owned by Mr. Lin, (and/or entities affiliated with or related to them) (collectively, the "Buyer Group"), together with seven existing shareholders of the Company (and/or entities affiliated with or related to them) who have elected to transfer, prior to the closing, their Shares to Parent in exchange for newly issued shares of Parent (the "Rollover Shareholders").

Subject to the terms and conditions of the Merger Agreement, at the effective time of the merger (the "Effective Time"), Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of Parent (the "Merger").  At the Effective Time, each of the Company's Shares issued and outstanding immediately prior to the Effective Time will be cancelled in exchange for the right to receive US$1.78 in cash and without interest, except for the excluded Shares (the "Excluded Shares"), which include: (i) Shares legally owned by Parent; and (ii) dissenting Shares (the "Dissenting Shares") owned by holders of Shares who have validly exercised and not effectively withdrawn or lost their dissenter's rights pursuant to Section 179 of the BVI Business Companies Act, 2004, as amended (the "BVI Companies Act") (the "Dissenting Shareholders"). Each Excluded Share issued and outstanding immediately prior to the Effective Time will be cancelled and will cease to exist, and no consideration will be delivered with respect thereto. Each Dissenting Share will be cancelled at the Effective Time for the right to receive the fair value of such Shares as determined in accordance with the provisions of the BVI Companies Act.

Parent has received from Mr. Lin an equity commitment letter, pursuant to which Mr. Lin has committed to subscribe for ordinary shares in Parent in the amount of US$19,545,858 subject to adjustment in certain cases.  Mr. Lin has also entered into a limited guarantee in favor of the Company.

The Company's board of directors, acting upon the unanimous recommendation of the independent committee formed by the board of directors (the "Independent 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 Independent Committee, which is comprised solely of independent and disinterested directors of the Company who are unaffiliated with any of Parent, Merger Sub, or the Buyer Group, negotiated the terms of the Merger Agreement with the assistance of its financial and legal advisors.

The Merger, which is currently expected to close in the first quarter of 2014, is subject to customary closing conditions, including the approval by an affirmative vote of shareholders representing more than seventy percent (70%) of the outstanding Shares of the Company as of the record date, present and voting in person or by proxy as a single class at an extraordinary general meeting of the Company's shareholders which will be convened to consider the approval of the Merger Agreement and the Merger. As of the date of the Merger Agreement, the Rollover Shareholders have agreed under a voting agreement to vote all in favor of the Merger Agreement and consummation of the transactions contemplated thereby, including the Merger. If completed, the Merger will result in the Company becoming a privately held company and its Shares will no longer be listed on Nasdaq.

Posted-In: News M&A

 

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