Yongye International, Inc. Enters Into Definitive Merger Agreement
BEIJING, Sept. 23, 2013
BEIJING, Sept. 23, 2013 /PRNewswire-FirstCall/-- Yongye International, Inc.
(NASDAQ: YONG) ("Yongye" or the "Company"), a leading developer, manufacturer
and distributor of crop nutrient products in China, today announced that the
Company has entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Full Alliance International Limited ("Holdco"), a British
Virgin Islands company, Yongye International Limited ("Parent"), a Cayman
Islands exempted company with limited liability, and Yongye International
Merger Sub Limited, a Nevada corporation and a wholly-owned, direct subsidiary
of Parent ("Merger Sub").
Subject to satisfaction of the Merger Agreement's terms and conditions, upon
consummation of the merger, 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"). Pursuant to the Merger Agreement, upon
completion of the Merger, each of the Company's shares of common stock issued
and outstanding immediately prior to the effective time of the Merger (the
"Shares") will be converted into the right to receive US$6.69 in cash without
interest, except for (i) Shares owned by Holdco, Parent and Merger Sub,
including shares to be contributed to Parent by Holdco, Mr. Zishen Wu, Prosper
Sino Development Limited and MSPEA Agriculture Holding Limited, immediately
prior to the effective time of the Merger pursuant to a contribution
agreement, dated as of September 23, 2013, among Parent, Holdco, Mr. Zishen
Wu, Prosper Sino Development Limited and MSPEA Agriculture Holding Limited,
and (ii) Shares held by the Company or any subsidiary of the Company ((i) and
(ii) collectively, the "Excluded Shares"), which will be cancelled and cease
to exist as of the effective time of the Merger. The offer represents a
premium of 39.7% over the closing price of the Company's common stock of
US$4.79 per share on October 12, 2012, the last trading day prior to the
Company's announcement of its receipt of a "going-private" proposal.
Mr. Zishen Wu and Lead Rich International Limited will provide cash equity
financing of US$12 million and US$15 million, respectively, for the Merger on
the terms and subject to the conditions in the equity commitment letters
provided by them in connection with the Merger.
Parent has secured (i) senior debt financing for the Merger of up to US$214
million from China Development Bank Corporation, Inner Mongolia branch and
(ii) mezzanine debt financing for the Merger of US$35 million from Lead Rich
International Limited. Abax Global Capital (Hong Kong) Limited and its
affiliates are not participating in the transactions contemplated by the
Merger Agreement and have terminated the consortium agreement previously
entered into with Mr. Zishen Wu, Holdco and MSPEA Agriculture Holding Limited.
The Company's Board of Directors, acting upon the unanimous recommendation of
a special committee of the Board of Directors comprised solely of independent
and disinterested directors (the "Special Committee"), approved and adopted
the Merger Agreement and has recommended that the Company's stockholders vote
to approve the Merger Agreement. The Special Committee negotiated the terms of
the Merger Agreement with the assistance of its financial and legal advisors.
The transaction, which is currently expected to close before the end of the
first fiscal quarter of 2014, is subject to the approval of the Merger
Agreement by the (i) affirmative vote of the holders of at least a majority of
the issued and outstanding Shares and preferred shares, voting together as a
single class, with the number of votes the holders of preferred shares shall
be entitled to vote equal to the number of Common Shares into which such
preferred shares are convertible, as determined in accordance with the
articles of incorporation of the Company, (ii) affirmative vote or consent of
the holders of at least a majority of the issued and outstanding preferred
shares and (iii) affirmative vote of the holders of at least a majority of the
issued and outstanding Shares (other than the Excluded Shares).
The Company will schedule a special meeting of its stockholders (the "Special
Meeting") for the purpose of voting on the approval of the Merger Agreement.
If completed, the Merger will result in the Company becoming a privately held
company and its shares will no longer be listed on The NASDAQ Global Market.
Houlihan Lokey Capital, Inc. is serving as financial advisor to the Special
Committee. Cleary Gottlieb Steen & Hamilton LLP is serving as U.S. legal
advisor to the Special Committee. Loeb & Loeb LLP is serving as U.S. legal
advisor to the Company. Skadden, Arps, Slate, Meagher & Flom LLP is serving as
U.S. legal advisor to Mr. Zishen Wu and Full Alliance International Limited.
Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as U.S. legal advisor
to MSPEA Agriculture Holding Limited. Weil, Gotshal & Manges LLP is serving as
U.S. legal advisor to Lead Rich International Limited. Akin Gump Strauss Hauer
& Feld LLP is serving as U.S. legal advisor to Houlihan Lokey Capital, Inc.
Additional Information about the Transaction
The Company will file with the Securities and Exchange Commission (the "SEC")
a Current Report on Form 8-K regarding the transaction, which will include the
Merger Agreement and related documents. All parties desiring details regarding
the transaction are urged to review these documents, which are available at
the SEC's website (http://www.sec.gov).
The Company will file a proxy statement with the SEC in connection with the
Special Meeting to approve the proposed Merger with Merger Sub, pursuant to
which the Company would be acquired by Parent. In addition, certain
participants in the proposed transaction will prepare and mail to the
Company's stockholders a Schedule 13E-3 transaction statement. These documents
will be filed with the SEC as soon as practical. INVESTORS AND STOCKHOLDERS
ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THESE MATERIALS AND OTHER
MATERIALS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, AS THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT PARENT, THE COMPANY, THE PROPOSED MERGER, THE
PERSONS SOLICITING PROXIES IN CONNECTION WITH THE PROPOSED MERGER ON BEHALF OF
THE COMPANY AND THE INTERESTS OF THOSE PERSONS IN THE PROPOSED MERGER AND
RELATED MATTERS. In addition to receiving the proxy statement and Schedule
13E-3 transaction statement by mail, stockholders also will be able to obtain
these documents, as well as other filings containing information about the
Company, the proposed Merger and related matters, without charge, from the
SEC's website (http://www.sec.gov) or at the SEC's public reference room at
100 F Street, NE, Room 1580, Washington, D.C. 20549. In addition, these
documents can be obtained, without charge, by contacting the Company at Yongye
International, Inc., 6th Floor, Suite 608, Xue Yuan International Tower, No. 1
Zhichun Road, Haidian District, Beijing, PRC, telephone: +86 10 8231 8866.
The Company and certain of its directors, executive officers and other members
of management and employees may, under SEC rules, be deemed to be
"participants" in the solicitation of proxies from the Company's stockholders
with respect to the proposed Merger. Information regarding the persons who may
be considered "participants" in the solicitation of proxies will be set forth
in the proxy statement and Schedule 13E-3 transaction statement relating to
the proposed Merger when it is filed with the SEC. Additional information
regarding the interests of such potential participants will be included in the
proxy statement and Schedule 13E-3 transaction statement and the other
relevant documents filed with the SEC when they become available.
This announcement is neither a solicitation of a proxy nor an offer to
purchase nor a solicitation of an offer to sell any securities. This
announcement is also not a substitute for any proxy statement or other filings
that may be made with the SEC should the proposed Merger go forward.
About Yongye International, Inc.
Yongye International, Inc. is a leading crop nutrient company headquartered in
Beijing, with its production facilities located in Hohhot, Inner Mongolia,
China. Yongye's principal product is a liquid crop nutrient, from which the
Company derived substantially all of the sales in 2012. The Company also
produces powder animal nutrient product which is mainly used for dairy cows.
Both products are sold under the trade name "Shengmingsu", which means "life
essential" in Chinese. The Company's patented formula utilizes fulvic acid as
the primary compound base and is combined with various micro and macro
nutrients that are essential for the health of the crops. The Company sells
its products primarily to provincial level distributors, who sell to the
end-users either directly or indirectly through county-level and village-level
distributors. For more information, please visit the Company's website at
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this announcement may be viewed as
"forward-looking statements" within the meaning of Section 27A of U.S.
Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Act
of 1934, as amended. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors, which may cause the actual
performance, financial condition or results of operations of the Company to be
materially different from any future performance, financial condition or
results of operations implied by such forward-looking statements. Detailed
information regarding factors that may cause actual results to differ
materially from the results expressed or implied by statements in this press
release may be found in the Company's periodic filings with the SEC, including
the factors described in the section entitled "Risk Factors" in its annual
report on Form 10-K for the year ended December 31, 2012, as amended. The
accuracy of these statements may be affected by a number of business risks and
uncertainties that could cause actual results to differ materially from those
projected or anticipated. The Company undertakes no ongoing obligation, other
than that imposed by law, to update these statements.
This press release contains forward-looking information about the Company that
is intended to be covered by the safe harbor for forward-looking statements
provided by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are statements that are not historical facts.
These statements can be identified by the use of forward-looking terminology
such as "believe," "expect," "may," "will," "should," "project," "plan,"
"seek," "intend," or "anticipate" or the negative thereof or comparable
terminology, and include discussions of strategy, and statements about
industry trends and the Company's future performance, operations and products.
A number of the matters discussed herein that are not historical or current
facts deal with potential future circumstances and developments, in
particular, whether and when the transactions contemplated by the Merger
Agreement will be consummated. The discussion of such matters is qualified by
the inherent risks and uncertainties surrounding future expectations generally
and also may materially differ from actual future experience involving any one
or more of such matters. Such risks and uncertainties include: any
conditions imposed on the parties in connection with consummation of the
transactions described herein; adoption of the Merger Agreement by our
stockholders; satisfaction of various other conditions to the closing of the
transactions described herein; and the risks that are described from time to
time in our reports filed with the SEC.
Yongye International, Inc.
Ms. Kelly Wang
Finance Director – Capital Markets
Ms. Rain Xia
Phone: +86-10-8232-8866 x 8827
Mr. John Capodanno (U.S.)
Ms. May Shen (Beijing)
SOURCE Yongye International, Inc.
Press spacebar to pause and continue. Press esc to stop.