GUANGZHOU, China, Sept. 26, 2012 /PRNewswire-FirstCall/ -- 7 Days
Group Holdings Limited (NYSE: SVN; "7 Days Group" or the
"Company"), a leading economy hotel chain based in China, announced today that its board of
directors has received a proposal letter dated September 26, 2012 from certain existing
shareholders of the Company, including Mr. Boquan He, Mr. Nanyan
Zheng and their respective affiliates, and joint sponsors,
including the Carlyle Group and Sequoia Capital China and their
respective affiliates (collectively, the "Consortium Members"), to
acquire all of the outstanding shares of the Company not currently
owned by the existing shareholders in a going private transaction
(the "Transaction") for US$4.2333 per
ordinary share of the Company and US$12.70 per American Depositary share ("ADS",
each ADS representing 3 ordinary shares of the Company), as the
case may be, in cash, subject to certain conditions.
According to the proposal letter, the Consortium Members intend
to form an acquisition vehicle for the purpose of implementing the
Transaction, and the Transaction is intended to be financed with a
combination of equity capital funded by the Consortium Members and
third-party debt. A copy of the proposal letter is attached hereto
as Exhibit A.
The Company expects that its board of directors will form a
special committee consisting of independent directors (the
"Independent Committee") to consider this proposal. The Company
also expects that the Independent 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 board just received the non-binding proposal
and no decisions have been made 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.
About 7 Days Group
7 Days Group is a leading and fast growing national economy
hotel chain based in China. It converts and operates limited
service economy hotels across major metropolitan areas in
China under its award-winning "7
Days Inn" brand. The Company strives to offer consistent and
high-quality accommodations and services primarily to the
growing population of value-conscious business and leisure
travelers who demand affordable, clean, comfortable,
convenient and safe lodging, and to respond to its guests'
needs.
Cautionary Note About Forward-looking Statements:
This press release contains forward-looking statements,
including statements regarding the quarterly earnings forecast,
anticipated performance, general business outlook and projected
results of operations. These statements are made under the "safe
harbor" provisions of Section 21E of the Securities Exchange Act of
1934, as amended. 7 Days Group has based these forward-looking
statements largely on its current expectations and projections
about future events and financial trends that it believes may
affect its financial condition, results of operations, business
strategy and financial needs. 7 Days Group may also make written or
oral forward-looking statements in its reports filed or furnished
with the U.S. Securities and Exchange Commission (the "SEC"), in
press releases and other written materials and in oral statements
made by its officers, directors or employees to third parties.
Statements that are not historical facts, including statements
about beliefs and expectations, are forward-looking statements and
are subject to change, and such change may be material and may have
a material adverse effect on 7 Days Group's financial condition and
results of operations for one or more periods. Forward-looking
statements involve inherent risks and uncertainties. All
forward-looking statements are subject to various risks and
uncertainties, including but not limited to regulatory
developments, deteriorating economic conditions and unavailability
of real estate financing, which could cause actual results to
differ materially from expectations. The factors that could affect
7 Days Group's future financial results are discussed more fully in
7 Days Group's filings with the SEC. Unless otherwise specified,
all information provided in this press release is as of the date of
this press release, and 7 Days Group does not undertake any
obligation to update any such information, except as required under
applicable law.
Exhibit A
September 26, 2012
The Board of Directors
7 Days Group Holdings Limited
5C-11 Creative Industry Zone, 397 Xin Gang Zhong Road
Guangzhou, Guangdong 510310
People's Republic of China
Dear Members of the Board of Directors,
We, Boquan He, Nanyan Zheng, Prototal Enterprises Limited,
Fortune News International Limited, Hawaii Asia Holdings III
Limited, an affiliate of the Carlyle Group, and Sequoia Capital
China (collectively, the "Consortium Members"), are pleased to
submit this preliminary non-binding proposal (the "Proposal") to
acquire all of the outstanding ordinary shares of 7 Days Group
Holdings Limited (the "Company") and the American Depositary Shares
of the Company ("ADSs", each ADS representing 3 ordinary shares of
the Company), in both cases, that are not already owned by us in a
"going private" transaction on the principal terms and conditions
described in this letter (the "Transaction").
We believe that our Proposal of US$4.2333 per ordinary share of the Company and
US$12.70 per ADS, as the case may be,
in cash provides a very attractive opportunity to the Company's
shareholders. Our Proposal represents a premium of 20.2% to the
closing price of the Company's ADSs on September 25, 2012 and a premium of 31.8% to the
volume-weighted average closing price of the Company's ADSs during
the last 30 trading days.
Set forth below are the key terms of our Proposal.
I. Consortium
The Consortium Members have entered into a consortium agreement
pursuant to which we will form an acquisition vehicle for the
purpose of implementing the Transaction, and have agreed to work
with each other exclusively in pursuing the Transaction. Please
also note that the Consortium Members who own ordinary shares of
the Company and/or ADSs are currently interested only in pursuing
the Transaction and are not interested in selling their shares in
any other transaction involving the Company.
II. Transaction and Purchase Price
We propose to acquire all of the outstanding ordinary shares of
the Company and the ADSs not already owned by us at a purchase
price equal to US$4.2333 per ordinary
share and US$12.70 per ADS, as the
case may be, in cash through a one-step merger of an acquisition
vehicle newly formed by the Consortium Members with and into the
Company.
III. Sources of Financing
We intend to finance the Transaction with a combination of
equity capital funded by the Consortium Members and third-party
debt.
IV. Due Diligence
Parties providing financing will require a timely opportunity to
conduct customary due diligence on the Company. We believe that we
and our financing sources will be in a position to complete due
diligence in a timely manner and in parallel with discussions on
definitive agreements.
V. Definitive Documentation
Consummation of the Transaction would require negotiation and
execution of a definitive merger agreement, as well as other
customary agreements for a transaction of this nature, each
containing terms and conditions appropriate for transactions of
this type. We have retained Skadden, Arps, Slate, Meagher &
Flom LLP and Kirkland & Ellis as international legal counsels
to the Consortium Members and are prepared to provide draft
agreements promptly.
VI. Confidentiality
We are sure you will agree 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 the definitive agreements
or terminated our discussions.
VII. Process
We believe that the Transaction will provide superior value to
the Company's public shareholders. We recognize that the board of
directors will evaluate the Proposal independently before it can
make a decision to endorse it. We recognize of course that the
board of directors of the Company will evaluate the Transaction
independently before it can make its determination whether to
endorse it. Given our involvement in the Transaction, we would
expect that the independent members of the board of directors will
proceed to consider our Proposal and the Transaction.
VIII. Miscellaneous
This Proposal is not a binding offer, agreement or agreement to
make a binding offer or agreement at any point in the future. This
letter is a preliminary indication of interest by the Consortium
Members 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. The parties will be bound only upon the execution of
mutually agreeable definitive documentation.
IX. Public Disclosure
In light of United States
securities law requirements, the Existing Shareholders will be
making a filing with the Securities and Exchange Commission on
Schedule 13D in which this letter will be publicly disclosed.
In closing, we would like to express our commitment to working
together to bring this 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,
BOQUAN HE
/s/ Boquan He
______________________________
PROTOTAL ENTERPRISES
LIMITED
|
By:
|
/s/ Boquan He
|
|
Name:
|
BOQUAN HE
|
|
Title:
|
Director
|
NANYAN ZHENG
/s/ Nanyan Zheng
____________________________________
|
FORTUNE NEWS
INTERNATIONAL LIMITED
|
By:
|
/s/ Nanyan
Zheng
|
|
Name:
|
NANYAN ZHENG
|
|
Title:
|
Director
|
HAWAII ASIA HOLDINGS III
LIMITED
|
By:
|
/s/ Thomas B.
Mayrhofer
|
|
Name:
|
THOMAS B.
MAYRHOFER
|
|
Title:
|
Director
|
SEQUOIA CAPITAL
CHINA
|
By:
|
/s/ Kok Wai
Yee
|
|
Name:
|
KOK WAI YEE
|
|
Title:
|
Authorized
Signatory
|
SOURCE 7 Days Group Holdings Limited