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eLong Enters into Definitive Merger Agreement for Going Private Transaction , elong Holders Not In Buyer Group Will Receive $9/Share In Cash

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eLong, Inc. ("eLong" or the "Company") (NASDAQ: LONG), a leading mobile and online travel service provider in China, today announced that it has entered into a definitive Agreement and Plan of Merger (the "Merger Agreement") with China E-dragon Holdings Limited ("Parent") and China E-dragon Mergersub Limited, a wholly owned subsidiary of Parent, pursuant to which Parent will acquire eLong. At the closing of the transaction, Parent will be owned by a consortium of certain of the Company's existing shareholders (including C-Travel International Limited, TCH Sapphire Limited, Ocean Imagination L.P. and Luxuriant Holdings Limited), along with Seagull Limited and certain management members of eLong (the "Buyer Group").

Under the terms of the Merger Agreement, eLong shareholders other than those in the Buyer Group will receive US$9.00 in cash for each ordinary share of the Company (a "Share") they hold or US$18.00 in cash for each American Depositary Share, each representing two (2) Shares (an "ADS") they hold. The price represents a premium of approximately 24% to the closing trading price of the Company's ADS on July 31, 2015, the last trading day prior to August 3, 2015, the date that the Company announced that it had received a "going-private" proposal from TCH Sapphire Limited, a British Virgin Islands company ("TCH") that is a wholly-owned subsidiary of Tencent Holdings Limited.

The Company's Board of Directors, acting upon the unanimous recommendation of a special committee of the Board of Directors (the "Special Committee"), approved the Merger Agreement and the transactions contemplated thereby and resolved to recommend that the Company's shareholders vote to authorize and approve the Merger Agreement and the transactions contemplated thereby. The Special Committee, which is composed solely of independent directors of the Company who are unaffiliated with any member of the Buyer Group or management of the Company, negotiated the terms of the Merger Agreement with the Buyer Group with the assistance of its independent financial and legal advisors.

The closing of the transactions contemplated by the Merger Agreement is subject to a number of customary conditions, including a vote of shareholders representing at least two-thirds of the voting power of the Shares present and vote in person or by proxy as a single class at an extraordinary general meeting of the Company's shareholders. The Buyer Group agreed to vote all of the Shares beneficially owned by them in favor of the authorization and approval of the Merger Agreement and the transactions contemplated thereby. The transaction is expected to close before the end of the second quarter of the Company's FY 2016. If completed, the transaction will result in the Company becoming a privately-held company and its ADSs will no longer be listed on the NASDAQ Global Select Market.

The transaction will be financed through a combination of cash and equity contributed by TCH and Ocean Imagination L.P., rollover of equity by C-Travel International Limited and Luxuriant Holdings Limited, as well as cash investments by Seagull Limited and certain existing members of the management of the Company. To date, the Buyer Group beneficially own, in the aggregate, approximately 78% of the outstanding Shares (excluding outstanding share-based awards).

The Company will prepare and file with the U.S. Securities and Exchange Commission (the "SEC") a Schedule 13E-3 transaction statement, which will include a proxy statement of the Company. The Schedule 13E-3 will include a description of the Merger Agreement and contain other important information about the merger, the Company and the other participants in the merger.

Duff & Phelps, LLC and Duff & Phelps Securities, LLC (together, "Duff & Phelps") are serving as financial advisors to the Special Committee. Kirkland & Ellis is serving as U.S. legal advisor to the Special Committee, Goulston & Storrs PC is serving as U.S. legal advisor to the Company, Conyers Dill & Pearman is serving as Cayman Islands legal advisor to the Company and DaHui Lawyers is serving as PRC legal advisor to the Company. Paul Hastings LLP is serving as U.S. legal advisor to Duff & Phelps.

Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as U.S. legal advisor to the Buyer Group and Jun He and Walkers are serving as PRC and Cayman Islands legal advisors to the Buyer Group, respectively. Skadden, Arps, Slate, Meagher & Flom LLP is serving as U.S. legal advisor to C-Travel International Limited, and Fenwick & West LLP is serving as U.S. legal advisor to Ocean Imagination L.P.

 

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