Le Gaga Holdings Limited Announces Receipt of "Going Private" Proposal at US$4.01 Per ADS and US$0.0802 Per Ordinary Share
22 Mayo 2013 - 5:31AM
Le Gaga Holdings Limited (Nasdaq:GAGA) ("Le Gaga" or the
"Company"), a leading greenhouse vegetable producer in China,
announced today that its board of directors has received a
non-binding proposal letter dated May 21, 2013 from Ms. Na Lai
Chiu, the chairman of the Company's board of directors, Mr. Shing
Yung Ma, a director and the chief executive officer of the Company,
and SC China Holding Limited, a company indirectly wholly owned by
Mr. Neil Nanpeng Shen, a director of the Company, on behalf of
funds managed and/or advised by it (together with its and their
affiliates, Ms. Na Lai Chiu and Mr. Shing Yung Ma, the
"Consortium") to acquire all of the outstanding shares of the
Company not currently owned by the Consortium in a "going private"
transaction (the "Transaction") at a price of US$4.01 in cash per
American Depositary Share of the Company ("ADS," each ADS
representing 50 ordinary shares of the Company), or US$0.0802 in
cash per ordinary share of the Company, as the case may be.
According to the proposal letter, the Consortium intends to form
an acquisition company to implement the Transaction, and has held
discussions with certain financial institutions that have expressed
interest in financing the Transaction. A copy of the proposal
letter is attached hereto as Exhibit A.
The Company's board of directors has formed a special committee
consisting of three independent directors (the "Special Committee")
to consider this proposal. The Company expects that the Special
Committee will retain a financial advisor and legal counsel to
assist it in its work. The Company cautions its shareholders and
others considering trading in its securities that the Company has
just received the non-binding proposal and has not made any
decisions with respect to the Company's response to the proposal.
There can be no assurance that any definitive offer will be made,
that any agreement will be executed or that this or any other
transaction will be approved or consummated.
Weil, Gotshal & Manges LLP is acting as U.S. counsel to the
Consortium. Latham & Watkins is acting as the Company's U.S.
counsel.
About Le Gaga Holdings Limited
(Nasdaq:GAGA)
Le Gaga is a leading greenhouse vegetable producer in China. The
Company sells and markets greenhouse vegetables such as peppers,
tomatoes, cucumbers and eggplants, as well as green leafy
vegetables to wholesalers, institutional customers and supermarkets
in China and Hong Kong. The Company has successfully built a
trusted brand among its customers. The Company currently operates
farms in the Chinese provinces of Fujian, Guangdong and Hebei.
Leveraging its large-scale greenhouses, proprietary horticultural
know-how and comprehensive database, the Company specializes in
producing and selling high-quality, off-season vegetables during
the winter months.
Exhibit A
May 21, 2013
The Board of Directors Le Gaga Holdings Limited Unit 1105, The
Metropolis Tower 10 Metropolis Drive Hung Hom, Kowloon Hong
Kong
Dear Members of the Board of Directors:
We, Na Lai Chiu (the "Chairwoman"), Shing Yung Ma (the
"Founder") and SC China Holdings Limited, on behalf of funds
managed and/or advised by it (together with its and their
affiliates, "Sequoia" and, together with the Chairwoman and the
Founder, the "Consortium"), are pleased to submit this preliminary
non-binding proposal to acquire all of the outstanding shares of Le
Gaga Holdings Limited (the "Company") that are not already directly
or indirectly beneficially owned by us in a going private
transaction on the principal terms and conditions described in this
letter (the "Transaction"). Collectively, the Consortium
beneficially owns 1,117,921,001 ordinary shares of the Company,
which represents 50.84% of the total outstanding ordinary shares of
the Company, as of the date hereof.
We believe that our proposal of US$4.01 in cash per American
Depositary Share of the Company ("ADS," with each ADS representing
50 ordinary shares of the Company), or $0.0802 in cash per ordinary
share of the Company, as the case may be, provides a very
attractive opportunity to the Company's shareholders. Our proposal
represents a premium of 16.57% over the closing price of the ADSs
on May 20, 2013 and a premium of 20.67% over the volume-weighted
average closing price of the ADSs during the last 30 trading
days.
The terms and conditions upon which we are prepared to pursue
the Transaction are set forth below.
- Consortium. Members of the Consortium have entered into a
consortium agreement dated as of the date hereof, pursuant to which
we will form an acquisition company for the purpose of implementing
the Transaction and have agreed to work with each other exclusively
in pursuing the Transaction.
- Purchase Price. The consideration payable in the Transaction
will be US$4.01 in cash per ADS and $0.0802 in cash per ordinary
share (in each case other than those ADSs or ordinary shares held
by members of the Consortium and other shareholders that are
expected to be rolled over in connection with the Transaction).
- Financing. We have held discussions with financial institutions
that have expressed interests in providing financing in connection
with the Transaction and are confident that we will secure adequate
financing to consummate the Transaction.
- Due Diligence. We are ready to move expeditiously to complete
the Transaction as soon as practicable and believe that, with the
full cooperation of the Company, our financing providers can
complete customary legal, financial and accounting due diligence in
a timely manner and in parallel with discussions on the Definitive
Agreements (as defined below).
- Definitive Agreements. We are prepared to promptly negotiate
and finalize definitive agreements (the "Definitive Agreements") in
respect of the Transaction. These agreements will provide for
representations, warranties, covenants and conditions that are
typical, customary and appropriate for transactions of this type.
We have engaged Weil, Gotshal & Manges LLP as legal advisor to
the Consortium in connection with the Transaction.
- Process. Given the involvement of the Chairwoman, the Founder
and Sequoia as members of the Consortium in the Transaction, we
believe it is prudent and in the best interests of the Company for
the Company's Board of Directors to establish a special committee
of independent directors to consider the Transaction (the "Special
Committee"). We also expect that the Special Committee would retain
independent advisors, including an independent financial advisor,
to assist it in its work. In considering our offer, you should be
aware that we are interested only in acquiring the outstanding
ordinary shares of the Company that members of the Consortium do
not already beneficially own and which are not expected to be
rolled over in connection with the Transaction, and that we do not
intend to sell our stake in the Company to a third party.
- Confidentiality. We will ensure that this letter and the
consortium agreement are promptly filed and disclosed to the public
in accordance with applicable securities regulations. However, we
are sure you will agree that it is in all of our interests to
ensure that we proceed in a strictly confidential manner, unless
otherwise required by law, until we have executed the Definitive
Agreements or terminated our discussions.
- No Binding Commitment. This letter constitutes only a
preliminary indication of interest and does not constitute an offer
capable of acceptance or any binding commitment with respect to the
Transaction. A binding commitment will result only from the
execution of the Definitive Agreements, and then will be on terms
and conditions provided in such documentation.
* * * *
In closing, we would like to express our commitment to working
together to bring the Transaction to a successful and timely
conclusion. Should you have any questions regarding this proposal,
please do not hesitate to contact us. We look forward to hearing
from you.
Very truly yours,
/s/ Na-Lai
Chiu
Na-Lai Chiu
/s/ Shing Yung
Ma
Shing Yung Ma
SC China Holdings Limited
By: /s/ Kok Wai
Yee
Name: Kok Wai Yee Title: Authorized Signatory
CONTACT: PR China
Jane Liu
Tel: (852) 2522 1838
Email: jliu@prchina.com.hk
Henry Chik
Tel: (852) 2522 1368
Email: hchik@prchina.com.hk
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