Hanfeng Evergreen Enters Into Agreement to Be Taken Private at CDN$2.25 in Cash
TORONTO, ONTARIO -- (Marketwire) -- 02/11/13 -- Hanfeng Evergreen
Inc. (TSX:HF) ("Hanfeng" or the "Corporation") announced today that
Hanfeng, Mr. Xinduo Yu ("Mr. Yu") and 8310831 Canada Inc. (the
"Purchaser"), a corporation wholly-owned by Mr. Yu, have entered into
an arrangement agreement under which the Purchaser will acquire all
of the outstanding common shares of the Corporation not already owned
by Mr. Yu for cash consideration of CDN$2.25 per share (the
"Consideration"). The transaction is proposed to be effected by way
of a court-approved statutory plan of arrangement under the Business
Corporations Act (Ontario) (the "Arrangement"). Mr. Yu is the
Corporation's Chief Executive Officer and beneficially owns, or has
control or direction over, approximately 20.4% of Hanfeng's
outstanding common shares. This proposal by Mr. Yu to acquire Hanfeng
(the "Privatization Proposal") was previously announced on January 8,
The Consideration offered under the Arrangement represents a premium
of approximately 47% over the volume-weighted average price of the
shares based on the Corporation's trading volume on the TSX over the
30 trading days prior to the initial announcement of the
Privatization Proposal on January 8, 2013.
The Corporation has been advised that Agrium Inc., the beneficial
owner of approximately 20% of Hanfeng's outstanding common shares and
a significant company in the agricultural sector, has entered into a
support agreement with the Purchaser pursuant to which it has agreed
to vote its shares in favour of the Arrangement.
In order to consider the Arrangement, Hanfeng's annual and special
meeting (the "Meeting") has been rescheduled to Friday, March 15,
2013, at 8:30 a.m. (Toronto time). In addition to the usual annual
business, shareholders of the Corporation (the "Shareholders") will
be asked to consider and if thought fit approve a special resolution
in respect of the Corporation's proposed going-private transaction
pursuant to the Arrangement.
Shareholders of record as of 5:00 p.m. (Toronto time) on January 15,
2013, the record date for the Meeting, are entitled to receive notice
of and to attend, and to vote at, the Meeting or any adjournment or
postponement of the Meeting.
As previously announced, the board of directors formed a special
committee of independent directors (the "Special Committee"),
comprised of Loudon Owen, David Thomson and Edwin Nordholm, to review
and consider and make recommendations regarding the Privatization
Proposal. The Special Committee engaged Deloitte LLP ("Deloitte") as
its independent valuator and financial advisor, to prepare a
valuation and fairness opinion with respect to the Transaction (the
"Valuation and Fairness Opinion"). Subject to the qualifications,
restrictions and assumptions set forth in the Valuation and Fairness
Opinion, in the opinion of Deloitte, as of February 9, 2013, the
consideration payable under the Arrangement is fair, from a financial
point of view, to Shareholders other than Mr. Yu.
Having undertaken a thorough review of, and carefully considered, the
Arrangement, including consulting with its independent legal and
financial advisors, the Special Committee has unanimously determined
that the Arrangement is in the best interests of the Corporation.
Accordingly, the Special Committee unanimously recommended that the
board of directors approve the Arrangement Agreement and recommend
that Shareholders vote for the Arrangement Resolution.
Prior to voting on the Arrangement, Jonathan Pollack elected to
resign as a director of the Corporation. The remaining members of the
board of directors, following the recommendation of the Special
Committee, unanimously resolved (with Mr. Yu not participating) to
authorize the Corporation to enter into the Arrangement agreement,
submit the Arrangement to a vote of the Shareholders at the Meeting,
and recommend to Shareholders that they vote in favour of the
Arrangement. A copy of the Valuation and Fairness Opinion, the
factors considered by the Special Committee in arriving at its
recommendation, and other relevant background information will be
included in the management information circular that will be sent to
Shareholders in connection with the Meeting and will be filed on
SEDAR at www.sedar.com.
The Corporation intends to apply to obtain an interim order from the
Ontario Superior Court of Justice (Commercial List) on February 13,
2013, which provides for the calling and holding of the Meeting, the
Shareholders' right to dissent from the Arrangement resolution and
other procedural matters. The Corporation expects to mail the
information circular and related materials for the Meeting shortly
after obtaining the interim order.
Subject to the Corporation obtaining the Shareholders' approval for
the Arrangement resolution, a hearing in respect of the final Court
order is currently expected to take place on or about March 18, 2013.
At the hearing, the Court will consider, among other things, the
fairness and reasonableness of the Arrangement. The Court may approve
the Arrangement in any manner the Court may direct, subject to
compliance with such terms and conditions, if any, as the Court deems
If the Arrangement is completed, the common shares of the Corporation
will be delisted from the Toronto Stock Exchange and the Corporation
will also apply to the applicable Canadian securities regulatory
authorities to cease to be a reporting issuer in each province in
which it is currently a reporting issuer.
The board of directors cautions shareholders and others considering
trading in shares of the Corporation that the completion of the
Arrangement remains subject to a number of conditions including, but
not limited to, receipt of all regulatory, court and shareholder
approvals, including the approval of the Arrangement by (i) at least
two-thirds (66 2/3%) of the votes cast by the Shareholders present in
person or represented by proxy at the Meeting and entitled to vote,
and (ii) at least a majority of the votes cast by minority
Shareholders (being Shareholders other than Mr. Yu, the Purchaser,
their respective affiliates and associates and other joint actors
excluded from voting by applicable law) present in person or
represented by proxy at the Meeting. The closing of the Arrangement
is subject to the satisfaction of certain other closing conditions
customary in a transaction of this nature. Assuming these conditions
are satisfied, it is expected that the closing of the Arrangement
will be completed following the Meeting later in March, 2013.
The Corporation intends to file its interim financial statements and
MD&A in respect of the second quarter of fiscal 2013 ended December
31, 2012, on SEDAR on February 14, 2013. Due to the current
transaction, no conference call will be held.
This press release contains forward-looking statements based on
current expectations, including but not limited to Hanfeng's plans,
objectives and expectations, the Purchaser's plans, objectives and
expectations with respect to Hanfeng and its business, statements
regarding the timing of the Hanfeng Meeting and the closing of the
proposed transaction, and the anticipated impact of the proposed
transaction. These forward-looking statements entail various risks
and uncertainties that could cause actual results to differ
materially from those reflected in these forward-looking statements.
Risks and uncertainties about Hanfeng's business are more fully
discussed in the Company's disclosure materials, including its annual
information form and MD&A, filed with the securities regulatory
authorities in Canada. Additional important factors that could cause
actual results to differ materially include, but are not limited to:
the actual closing of the proposed transaction; the satisfaction or
non-satisfaction as applicable of one or more conditions to the
closing of the proposed transaction; delay of, or inability to
receive Hanfeng Shareholders' approval or approval of the Ontario
Superior Court of Justice. With respect to the forward-looking
statements and information concerning the anticipated impact and
completion of the proposed transaction and the anticipated timing for
completion of the proposed transaction, the Purchaser and Hanfeng
have provided such statements and information in reliance on certain
assumptions that they believe are reasonable at this time, including
assumptions as to the time required to prepare and mail Shareholder
Meeting materials to Hanfeng Shareholders, the ability of the parties
to receive, in a timely manner, the necessary Ontario Superior Court
of Justice and Hanfeng Shareholders' approval, and the ability of the
parties to satisfy, in a timely manner, the other conditions to the
closing of the proposed transaction. Readers are cautioned that the
foregoing list of important factors and assumptions is not
Forward-looking statements are not guarantees of future performance.
In light of the significant uncertainties inherent in the
forward-looking information included herein, any such forward-looking
information should not be regarded as representations by either the
Purchaser or Hanfeng that its respective objectives or plans will be
achieved. Investors are cautioned not to place undue reliance on any
forward-looking information contained herein. Forward-looking
statements are provided for the purpose of providing information
about management's current expectations and plans relating to the
future. Readers are cautioned that such information may not be
appropriate for other purposes. In addition, these forward-looking
statements relate to the date on which they are made. Hanfeng
disclaims any intention or obligation to update or revise any
forward-looking statements or the foregoing list of factors, whether
as a result of new information, future events or otherwise, except to
the extent required by law.
About Hanfeng Evergreen Inc.
Hanfeng is a leading producer and supplier of value-added fertilizer
solutions in emerging markets. It is the largest producer of slow and
controlled release fertilizer in two of world's most significant
agricultural markets: the People's Republic of China ("China") and
the Republic of Indonesia. As the first company to introduce slow and
controlled release fertilizers into China's agriculture market,
Hanfeng has established itself both as a market leader and innovator.
A Canadian company, Hanfeng is headquartered in Toronto, Ontario and
its shares trade on the Toronto Stock Exchange under the ticker HF.
Hanfeng Evergreen Inc.
Chairman of the Board of Directors
Spinnaker Capital Markets Inc.
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