E-House Enters into Definitive Agreement for Going Private Transaction
E-House (China) Holdings Limited, a leading real estate services company in China, today announced that it has entered into a definitive Agreement and Plan of with E-House Holdings Ltd. and E-House Merger Sub Ltd., a wholly-owned subsidiary of Parent.
Pursuant to the Merger Agreement, Parent will acquire the Company for a cash consideration equal to US$6.85 per ordinary share of the Company (each, a "Share") or American depositary share of the Company, each American depositary share representing one Share (each, an "ADS").
Subject to the terms and conditions of the Merger Agreement, at the effective time 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, and each of the Shares (including Shares represented by ADSs) issued and outstanding immediately prior to the effective time of the merger will be cancelled and cease to exist in exchange for the right to receive US$6.85 per Share or ADS, in each case, in cash, without interest and net of any applicable withholding taxes, except for (i) Shares (including Shares represented by ADSs) beneficially owned by Mr. Xin Zhou, the co-chairman of the board of directors and chief executive officer of the Company, Kanrich Holdings Limited, On Chance, Inc. and Jun Heng Investment Limited, each controlled by Mr. Zhou, Mr. Neil Nanpeng Shen, a member of the board of directors of the Company, Smart Create Group Limited and Smart Master International Limited, each controlled by Mr. Shen, and SINA Corporation (collectively, the "Buyer Group"), (ii) Shares (including Shares represented by ADSs) owned by the Company or any of its subsidiaries, (iii) Shares (including Shares represented by ADSs) held by the ADS depositary and reserved for issuance and allocation pursuant to the Company's share incentive plan, and (iv) Shares owned by holders who have validly exercised and not effectively withdrawn or lost their rights to dissent from the merger pursuant to Section 238 of the Companies Law of the Cayman Islands, which Shares will be cancelled at the effective time of the merger except for the right to receive the fair value of such Shares determined in accordance with the provisions of Section 238 of the Companies Law of the Cayman Islands.
The Buyer Group intends to fund the merger through a combination of a committed loan facility in the amount of $350 millionarranged by Shanghai Pudong Development Bank Co., Ltd., Nanhui Sub-Branch (the "Lender") pursuant to a debt commitment letter issued by the Lender and equity contributions of members of the Buyer Group pursuant to equity commitment letters issued by such members.
The Company's board of directors, acting upon the unanimous recommendation of the special committee formed by the board of directors (the "Special Committee"), has unanimously approved the Merger Agreement, and resolved to recommend that the Company's shareholders vote to authorize and approve the Merger Agreement and the transactions contemplated by the Merger Agreement, including the merger. The Special Committee, which is composed solely of independent directors of the Company who are unaffiliated with Parent, Merger Sub or any member of the Buyer Group or the management of the Company, exclusively negotiated the terms of the Merger Agreement with the Buyer Group with the assistance of its independent financial and legal advisors.
The merger, which is currently expected to close during the second half of 2016, is subject to various closing conditions, including a condition that the Merger Agreement be authorized and approved by an affirmative vote of shareholders representing two-thirds or more of the Shares present and voting in person or by proxy as a single class at an extraordinary general meeting of the Company's shareholders. As of the date of the Merger Agreement, the Buyer Group beneficially owned, in the aggregate, approximately 44.9% of the outstanding Shares (including Shares represented by ADSs). Pursuant to a voting agreement entered between the Buyer Group and Parent, the members of the Buyer Group have agreed to vote all the Shares and ADSs beneficially owned by them in favor of the authorization and approval of the Merger Agreement and the merger. If completed, the merger will result in the Company becoming a privately-held company and its ADSs will no longer be listed on the New York Stock Exchange.
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.
In connection with the merger, Duff & Phelps, LLC and Duff & Phelps Securities, LLC (collectively, "Duff & Phelps"), are serving as the financial advisor to the Special Committee, Davis Polk & Wardwell LLP is serving as U.S. legal counsel to the Special Committee and Walkers is serving as Cayman Islands legal counsel to the Special Committee. Cleary Gottlieb Steen & Hamilton LLP is serving as legal counsel to Duff & Phelps.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as U.S. legal counsel to the Buyer Group, and Travers Thorp Alberga is serving as Cayman Islands legal counsel to the Buyer Group.