BEIJING, Aug. 3, 2015 /PRNewswire/ -- eLong, Inc. (Nasdaq:
LONG), a leading mobile and online
travel service provider in China,
today announced that its Board of Directors (the "Board") has
received a preliminary non-binding proposal letter, dated
August 3rd, 2015, from
Tencent Holdings Limited
("Tencent"), proposing a
"going-private" transaction (the "Transaction") to acquire all
outstanding ordinary shares (the "Shares") of eLong, Inc. (the
"Company") not already beneficially owned by TCH Sapphire Limited
which is a wholly owned subsidiary of Tencent, the major shareholders in the Company
accounting for at least 70% in voting power of the Company (the
"Majority Stockholders") and certain members of Company management
(the "Company Management"), for $18
in cash per American depositary share of the Company ("ADS"), each
representing two (2) Shares. The proposed purchase price represents
a premium of approximately 24.1% to the closing trading price of
the Company's ADS on July 31,
2015, the last trading day prior to the date hereof and a
premium of 20.3% to the volume-weighted average closing price
during the last 30 trading days.
Tencent's proposal is conditioned upon the Majority Stockholders
agreeing to support, and to roll their existing equity in the
Company into, the Transaction. Tencent intends to seek the support of the
Majority Stockholders for this proposal and to negotiate definitive
agreements for the participation of the Majority Stockholders in
the Transaction concurrently with the completion of due diligence
and the negotiation of definitive documentation for the
Transaction. Tencent also intends to
invite the Company Management to join in the proposed
Transaction.
Tencent currently beneficially
owns 5,038,500 high-vote ordinary shares and 6,031,500 ordinary
shares, representing approximately 15.0% of the aggregate voting
power of the Company.
According to the proposal letter, Tencent intends to finance the Transaction with a
combination of new and rollover equity capital funded by
Tencent, Company Management and the
Majority Stockholders. A copy of the proposal letter is attached as
Annex A to this press release.
The Board intends to form a special committee composed entirely
of independent and disinterested directors to consider Tencent's
non-binding proposal, and plans to authorize the special committee
to retain legal and financial advisors to assist it in evaluating
the Transaction.
The Board cautions the Company's shareholders and others
considering trading in its securities that the Board has just
received the non-binding proposal letter from Tencent and no decisions have been made with
respect to the Company's response to the Transaction. There can be
no assurance that any definitive offer will be made by Tencent, that any agreement will be executed or
that the Transaction or any other transaction will be approved or
consummated. The Company does not undertake any obligation to
provide any updates with respect to this or any other transaction,
except as required under applicable law.
Safe Harbor Statement
This press release may contain
statements that are "forward-looking" statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, Section
21E of the Securities Exchange Act of 1934, as amended, and as
defined in the Private Securities Litigation Reform Act of 1995.
Words such as "anticipate," "believe," "estimate," "expect,"
"forecast," "intend," "may," "plan," "project," "predict,"
"future," "is/are likely to," "should" and "will" and similar
expressions as they relate to eLong are intended to identify such
forward-looking statements, but are not the exclusive means of
doing so. We caution you that there are risks associated with such
forward-looking statements, including the risk that neither a
transaction based on Tencent's non-binding proposal nor any
comparable transaction will be completed.
Except as required by law, we undertake no obligation to update
or revise publicly any forward-looking statements, whether as a
result of new information, future events or otherwise. All
forward-looking statements contained in this press release are
qualified by reference to this cautionary statement.
About eLong, Inc.
eLong, Inc. (Nasdaq: LONG) is a
leader in mobile and online accomodations reservations in
China. eLong technology enables
travelers to book hotels, guesthouses, apartments and other
accommodations, as well as air and train tickets, through
convenient mobile and tablet applications (m.eLong.com), websites
(www.eLong.com), 24 hour customer service, and easy to use tools
such as destination guides, maps and user reviews. eLong's largest
shareholders are Ctrip.com International, Ltd. (Nasdaq: CTRP);
Keystone Lodging Holdings Limited and Plateno Group Limited
together; and Tencent Holdings Ltd.
(HKSE: 0700).
For further information, please contact:
eLong,
Inc.
Investor Relations
ir@corp.elong.com
+86-10-6436-7570
Annex A
Non-binding Proposal Letter from Tencent
August 3rd, 2015
The Board of Directors
eLong, Inc.
Xingke Plaza, Tower B, Third Floor
10 Middle Jiuxianqiao Road,
Chaoyang District, Beijing
100015
People's Republic of China
Dear Directors:
Tencent Holdings Limited, on
behalf of its wholly owned subsidiary TCH Sapphire Limited
(collectively, "Tencent" or "we") is
pleased to submit this preliminary non-binding proposal to acquire
all outstanding ordinary shares (the "Shares") of eLong, Inc. (the
"Company") not already beneficially owned by Tencent, the Majority Stockholders (as defined
below) and certain members of Company management (the "Company
Management"), in a going private transaction (the
"Transaction").
Our proposed purchase price for each American depository share
of the Company ("ADS," each representing two (2) Shares) is
$18.0 in cash. We believe that
our proposal provides an attractive opportunity for the Company's
shareholders. Our proposed purchase price represents a
premium of approximately 24.1% to the closing trading price of the
Company's ADS on July 31, 2015,
the last trading day prior to the date hereof and a premium of
20.3% to the volume-weighted average closing price during the last
30 trading days.
Our proposal is conditioned upon the major shareholders in the
Company accounting for at least 70% in voting power of the Company
(the "Majority Stockholders") agreeing to support, and to roll
their existing equity in the Company into, the Transaction.
We intend to seek the support of the Majority Stockholders for this
proposal and to negotiate definitive agreements for the
participation of the Majority Stockholders in the Transaction
concurrently with the completion of due diligence and the
negotiation of definitive documentation for the
Transaction.
We also intend to invite the Company Management to join in the
proposed Transaction.
Tencent currently beneficially
owns 5,038,500 high-vote ordinary shares and 6,031,500 ordinary
shares, representing approximately 15.0% of the aggregate voting
power of the Company.
The terms and conditions upon which Tencent is prepared to pursue the Transaction are
set forth below.
1. Purchase Price. The consideration payable for
each ADS will be $18.0 in cash, or
$9.0 in cash per Share (in each case
other than those ADSs, ordinary shares or high vote ordinary shares
beneficially owned by the Majority Stockholders and Company
Management).
2. Financing. We intend to finance the Transaction
with a combination of new and rollover equity capital funded by
Tencent, Company Management and the
Majority Stockholders. We do not anticipate requiring debt
financing to consummate the Transaction.
3. Due Diligence. We are prepared to move
expeditiously to complete the proposed Transaction as soon as
practicable. We have engaged Paul, Weiss, Rifkind, Wharton
& Garrison LLP as our legal counsel and believe that, with the
full cooperation of the Company, we can complete customary legal,
financial and accounting due diligence for the Transaction, in a
timely manner and in parallel with discussions on the definitive
agreements. We would like to ask the board of directors of
the Company (the "Board") to accommodate such due diligence request
and approve the provision of confidential information relating to
the Company and its business subject to a customary form of
confidentiality agreement.
4. Definitive Documentation. Assuming the support
of the Majority Stockholders and Company Management and our
satisfaction with the results of our due diligence investigation,
we are prepared to promptly negotiate and finalize the definitive
agreements (the "Definitive Agreements") providing for the
Transaction and for the rollover among Tencent, Company Management and the Majority
Stockholders. This proposal is subject to the execution of
the Definitive Agreements. We expect that such Definitive
Agreements with respect to the Transaction will contain
representations, warranties, covenants and conditions which are
typical, customary and appropriate for transactions of this
type.
5. Process. We believe the Transaction will provide
superior value to the Company's public shareholders. We
recognize that the Board will evaluate the Transaction
independently before it can make its determination to endorse
it. Given the involvement of Tencent and the potential involvement of Company
Management and the Majority Stockholders, we expect that the
independent, disinterested members of the Board will proceed to
consider the proposed Transaction. In considering this
proposal, you should be aware that we are interested only in
acquiring outstanding Shares that Tencent, the Company Management and the Majority
Stockholders do not already beneficially own.
6. Confidentiality. Tencent will, as required by law, promptly file
an amendment to its Schedule 13D to disclose this proposal.
However, we are sure you will agree with us that it is in all of
our interests to ensure that we proceed in a confidential manner,
unless otherwise required by law, until we have executed Definitive
Agreements or terminated our discussions.
7. No Binding Commitment. This proposal is not a
binding offer, agreement or an agreement to make a binding
offer. This letter is a preliminary indication of interest by
Tencent and does not contain all
matters upon which agreement must be reached in order to consummate
the proposed Transaction, nor does it create any binding rights or
obligations in favor of any person. A binding commitment will
result only from the execution of Definitive Agreements, and then
will be on the terms and conditions provided in such
documentation.
In closing, Tencent would like to
express its commitment to working together to bring this proposed
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.
Sincerely,
TENCENT HOLDINGS
LIMITED
By: /s/ James Mitchell
Name: James Mitchell
Title: Chief Strategy Officer
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SOURCE eLong, Inc.