Feihe Says Enters Merger Pact for $7.40/Share

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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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Posted In: NewsM&A
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