BEIJING, Oct. 3, 2017 /PRNewswire/ -- SINA Corporation
("SINA" or the "Company") (NASDAQ: SINA), a leading online media
company serving China and the
global Chinese communities, today announced that the SINA Board of
Directors has sent a letter to shareholders in connection with the
Company's upcoming 2017 Annual General Meeting of Shareholders (the
"Annual General Meeting") to be held on November 3, 2017. SINA shareholders of record at
the close of business on September 20,
2017 are entitled to attend and vote at the Annual General
Meeting. The proxy statement and other important information
related to the Annual General Meeting can be found on the Company's
website at http://corp.sina.com.cn/eng/AGM/.
The SINA Board of Directors unanimously recommends that
shareholders vote "FOR" Yichen
Zhang and vote "AGAINST" each of Aristeia's nominees
by signing, dating and returning the WHITE proxy card
TODAY.
The full text of the letter follows:
SINA URGES SHAREHOLDERS TO VOTE THE WHITE
PROXY CARD "FOR" YICHEN
ZHANG
THE CURRENT SINA BOARD BRINGS A PROVEN RECORD
OF VALUE CREATION DRIVEN BY WORLD-CLASS EXPERIENCE AND
FINANCIAL ACUMEN
ARISTEIA HAS FAILED TO PRESENT CANDIDATES WITH
ADDITIVE SKILLS OR EXPERIENCE
SINA URGES SHAREHOLDERS TO VOTE "AGAINST" EACH
OF ARISTEIA'S NOMINEES, BRETT KRAUSE AND THOMAS MANNING, ON THE
WHITE PROXY CARD
October 3, 2017
Dear Fellow Shareholders,
At the SINA 2017 Annual General Meeting to be held on
November 3, 2017, you will be asked
to make an important decision regarding the composition of the
Company's Board of Directors that could impact the future of the
Company and the value of your investment in SINA. Your Board of
Directors unanimously recommends that you vote "FOR" the
re-election of Yichen Zhang on the
WHITE proxy card TODAY.
Under the current leadership and direction of the Board, SINA
continues to successfully execute its strategic plan, deliver
strong financial results, drive growth and create substantial value
for all shareholders. Despite this successful track record,
Aristeia has publicly stated that it will solicit proxies in order
to elect two of its own nominees to your Board.
Currently, you are represented by a Board of Directors that is
highly qualified, is committed to acting in your best interests and
has been carefully selected to ensure the right mix of skills and
expertise that is critical to overseeing a leading online media
company in China. Additionally,
80% of SINA's Board comprises independent directors. As you may
know, a New York City hedge fund,
Aristeia Capital, L.L.C., which owns approximately 3.5% of SINA's
shares, has launched a costly and disruptive proxy contest to elect
two of its hand-picked nominees to your Board. We urge our
shareholders to discard any blue proxy card or other proxy
materials sent to you by Aristeia and to vote "AGAINST" the
Aristeia nominees, Brett Krause and
Thomas Manning, on SINA's WHITE
proxy card. We believe that Aristeia's proposals will not
create sustainable shareholder value, but will instead consist of
financial engineering maneuvers that will introduce substantial
risk to your Company, including certain proposals that are simply
not feasible. We believe that now is not the right time
to risk derailing the Board's strategic plan.
In contrast, our collective Board, including our director
nominee, Yichen Zhang, has
the right mix of industry expertise and company knowledge to
deliver value to all shareholders, and it is important that you
vote "FOR" Mr. Yichen Zhang
on the WHITE proxy card TODAY.
YOUR CURRENT SINA BOARD HAS THE RIGHT MIX OF
LEADERSHIP EXPERIENCE COVERING ALL CRITICAL AREAS
How has the Board used its collective executive leadership
experience and institutional knowledge of investments to drive
success for SINA?
We, Charles Chao, Ter Fung Taso, Yan
Wang, Song-Yi Zhang and
Yichen Zhang, collectively bring
relevant expertise in China's
internet industry, professional online media and social media
businesses and finance and asset management at publicly-traded
companies. Our respective financial and operational leadership as
well as our governance experience provide us with a deep
understanding of how best to manage the financial and investment
functions of publicly traded companies operating in China. A number of us have drawn heavily from
our backgrounds to provide counsel to the financial analysis
involved in strategic decisions made by the SINA Board and to serve
as fiduciaries to SINA and its shareholders in our oversight and
accountability of management's execution of SINA's strategy.
The current Board is directly responsible for many of SINA's
greatest successes, including the launch and enormous success of
Weibo. We developed and executed a long-term vision to fully
incubate Weibo within SINA, identifying key investments that have
supported Weibo's infrastructure and further contributed to its
tremendous growth and outperformance. The Board's strategy,
management and oversight of Weibo up to Weibo's initial public
offering have also created an opportunity for SINA shareholders to
benefit greatly from Weibo's growth through SINA's nearly 120%
share price appreciation achieved since Weibo's IPO in April 2014 and our distribution of Weibo
shares.1 Since October
2016, we have distributed approximately 14.2 million Weibo
shares to SINA shareholders, representing more than 12% of SINA's
total holdings in Weibo valued at approximately US$1.4 billion.2
In short, your Board comprises world-class individuals with the
talent and commitment to oversee the implementation of SINA's
investment and operating strategy while leveraging their unique
experience to effectively and efficiently adapt to the volatile and
rapidly changing internet business market. Further, we reiterate
our commitment to continue holding management accountable for both
the Company's successes and failures and to ensure that when there
is need for change, it is swiftly addressed.
The Board has a proven track record of prudent capital
allocation execution. How does the Board think about capital
allocation priorities at SINA and how it has executed
the capital allocation plan?
Like many public companies, we are focused on a balanced capital
allocation strategy that responsibly incorporates investment in
organic and acquisitive growth while delivering returns to
shareholders.
As a result of our strong balance sheet, SINA has available
capital to opportunistically repurchase shares under our current
US$500 million share repurchase
authorization. We periodically pull this lever as a means of both
returning capital and assisting in managing any trading discount to
the Company's Net Asset Value ("NAV"). According to third-party
financial analysts, a discount to NAV is a common occurrence for
companies such as SINA that have a holding company structure, and
we are able to repurchase shares in the open market to help bring
spikes in the discount back in line with the standard holding
company range. Since March 2016, SINA
has repurchased US$311 million of its
shares under the share repurchase authorization.
Combined with the Weibo distributions, SINA has returned
approximately US$1.7 billion of
capital to security holders since 2014, which is the highest amount
for China-based internet and
technology companies listed in the U.S.
Our strategy at any given time also reflects the operating and
regulatory environment within the
People's Republic of China ("PRC"), which has a direct
influence on the way SINA conducts business and manages our balance
sheet – beyond the control of our Board and management team.
S&P Global recently issued a report discussing this issue and
"[t]he recent intensification of government efforts to rein in
corporate leverage…"3 The Board and
management team are very familiar with these factors and their
influence on our business in China, and it is vitally important that our
investors around the world understand the significance of the PRC's
governance within our Board deliberations and our process for
setting our long-term strategy with the management team.
The Board clearly has extensive experience within the
Chinese market and its regulatory environment. How has this shaped
SINA's M&A strategy?
Among our Board members, we have several directors with
extensive experience managing and advising Chinese companies on
financings for M&A transactions. Just as the PRC provides
guidance on corporate leverage, like all countries, there are also
laws, regulations and tax implications that govern M&A
activities.
In China, the laws governing
the value-added telecommunication industry and the media industry –
and especially those related to M&A – are highly complex. The
PRC requires acquisitions by foreign investors of Chinese companies
engaged in industries that are crucial to national security, such
as online media, to be subject to security review. We can think of
this process as one similar to the Committee on Foreign Investment
in the U.S. (CFIUS), which has caused many companies to withdraw
proposed transactions after significant time and resources have
been invested and shareholder value lost.
Through the collective insight of our Board members, this
presents very difficult hurdles for change of control transactions
for SINA. As far as partial distributions of assets, such as Weibo,
a basic analysis shows there would be significant tax disadvantages
to shareholders, as well as substantial costs incurred to both SINA
and Weibo due to dis-synergies resulting from a separation.
In its most recent communication, Aristeia seems to acknowledge
what third parties and SINA already understand – that its proposals
are impractical and unrealistic. Instead, Aristeia has chosen a new
tactic that resorts to personal attacks and half-truths and
intentionally ignores the fact that SINA shareholders have made
significant gains on their shares, including Aristeia, who has sold
in and out of SINA's stock throughout the share price appreciation
achieved since Weibo's IPO.
What inspires the Board most about the future of SINA, and
how do you all believe these components will create shareholder
value?
Our transition within SINA's core business to enhance our mobile
advertising platform is exciting, and we are confident that we will
successfully evolve SINA's approach in the current market
environment that is trending away from PC advertising and toward
mobile. SINA is already a leader in China and the global Chinese communities that
we serve, and there is so much potential value that we believe can
be created from this evolution to mobile ads. The entire Board is
focused on harnessing our collective experience to continue driving
innovation and value for SINA.
We are also inspired by the opportunities ahead for the
continued growth of Weibo as part of SINA and the benefits this
relationship brings to SINA shareholders. SINA and Weibo have
successfully shared services across data, management and IP that
each company can leverage to create value and advance its
respective strategy. This is a critical component of SINA's shift
to mobile ads and is accelerating the growth of SINA's Fintech
businesses by driving significant user traffic. Together, we expect
SINA will strengthen its core platform and improve performance,
while simultaneously continuing to advance Weibo's strategy and
deliver strong results. This is a win for all shareholders as they
continue to gain significant value for their investment and build
on the significant growth of SINA's share price since Weibo's
IPO.
Our commitment to driving value and alignment with shareholders'
interests is reflected in our collective Board ownership of 12.8%
of SINA's outstanding ordinary shares. Charles Chao, the Chairman of the Board and CEO,
has fervently demonstrated his personal commitment to the long-term
strategy and success of SINA as the Company's largest shareholder,
owning approximately 12% of SINA's outstanding ordinary shares. In
fact, Mr. Chao purchased these shares in June 2015 at an above-market price when SINA's
share price was under significant pressure for an extended period
of time in order to instill greater confidence in SINA's
shareholder base.
The market clearly supported Mr. Chao's investment as SINA's
share price grew by more than US$8.00
per share, or 23%, on June 1, 2015,
the day of the transaction announcement, and increased as much as
US$17.00 per share, or nearly 50%, in
the two weeks following the announcement.4
The recent solid operational and financial performance of SINA, two
years after Mr. Chao's decision, continues to benefit ALL
shareholders with an approximately 225% increase in SINA's share
price.5
Today's SINA is well positioned with the right plan, the right
structure and the right Board in place to deliver results and
shareholder value for the short-, mid- and long-term. We are
successfully executing a winning strategy and have strong
momentum.
PROTECT YOUR INVESTMENT – VOTE "FOR" OUR SINA
NOMINEE, YICHEN ZHANG
The Aristeia nominees, Mr. Krause, a tech-startup investor, and
Mr. Manning, a law school professor, are eligible to receive
payments of up to US$160,000 from
Aristeia for simply participating in Aristeia's costly and wasteful
proxy contest. Furthermore, if shareholders elect Messrs. Krause
and Manning, nearly 30% of the SINA Board would have been directly
compensated by a hedge fund, which owns a mere 3.5% of our shares,
seeking to implement a risky and value-destructive agenda.
How can Messrs. Krause and Manning possibly function
independently of Aristeia if they have been compensated by it?
We believe it is clear that they cannot.
Notwithstanding these direct ties, the experience of the
Aristeia nominees is not additive and may be detrimental to our
commitment to create value for ALL SINA shareholders. For
example, Mr. Krause has no experience serving on the Board of a
large, well-established public company and may have a potential
conflict of interest as a result of his personal involvement as a
managing partner of PurpleSky Capital, an angel investor in one of
SINA's direct competitors, Inke (映客). In addition, Mr. Manning
already serves on three public company boards, has commitments to
five other organizations and resides in Illinois, USA – he is therefore unlikely to
have the time necessary to devote to SINA. Finally, and most
importantly for SINA, both Mr. Krause and Mr. Manning lack
understanding of the Chinese regulatory market.
We urge you to vote "AGAINST" each of Aristeia's nominees on
the enclosed WHITE proxy card and to discard any blue proxy card or
other proxy materials you may receive from Aristeia.
Instead, we trust that you want us to implement strategies and
programs that are calculated to sustain our long-term performance
without undue risk. Now is the time for SINA to continue building
momentum and prevent anything from derailing the work that is
delivering results for all SINA shareholders. If that is indeed
what you desire, we encourage you to vote "FOR" Yichen Zhang and "AGAINST" each of Aristeia's
nominees TODAY by signing and dating the WHITE proxy card and
returning it in the postage-paid envelope provided.
We thank you for your continued support.
Sincerely,
Charles
Chao
Chairman of the Board
and CEO
|
Ter Fung
Tsao
Independent
Director
|
Yan Wang
Independent
Director
|
|
|
|
Song-Yi
Zhang
Independent
Director
|
Yichen
Zhang
Independent
Director
|
|
Your Vote Is
Important, No Matter How Many or How Few Shares You
Own!
If you have questions about how to vote your shares, please
contact:
INNISFREE M&A INCORPORATED
Shareholders may call toll-free (from the U.S. and Canada):
877-750-5834
International shareholders may call: +1-412-232-3651
Banks and brokers (call collect): 212-750-5833
Please visit http://corp.sina.com.cn/eng/AGM/ for more
information.
|
About SINA
We are an online media company serving China and the global Chinese communities. Our
digital media network of SINA.com (portal), SINA.cn (mobile
portal), SINA Mobile Apps and Weibo.com (social media) enable
Internet users to access professional media and user generated
content in multi-media formats from the web and mobile devices and
share their interests to friends and acquaintances.
SINA.com offers distinct and targeted professional content on
each of its region-specific websites and a full range of
complementary offerings. SINA.cn and SINA Mobile Apps provide news
information, professional and entertainment content from SINA.com
customized for mobile users in WAP (mobile browser) and mobile
application format. Weibo is a leading social media platform for
people to create, distribute and discover Chinese-language content.
Based on an open platform architecture, Weibo allows users to
create and post feeds and attach multi-media content, as well as
access a wide range of organically and third-party developed
applications, such as online games.
Through these properties and other product lines, we offer an
array of online media and social media services to our users to
create a rich canvas for businesses and advertisers to effectively
connect and engage with their targeted audiences.
Safe Harbor Statement
This letter contains forward-looking statements that relate to,
among other things, SINA's expected performance and SINA's
strategic and operational plans. SINA may also make forward-looking
statements in the Company's periodic reports to the U.S. Securities
and Exchange Commission (the "SEC"), in its annual report to
shareholders, 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 the Company's beliefs and expectations, are
forward-looking statements. These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "confidence," "estimates"
and similar statements. Forward-looking statements involve inherent
risks and uncertainties. A number of important factors could cause
actual results to differ materially from those contained in any
forward-looking statement. Potential risks and uncertainties
include, but are not limited to, failure to meet internal or
external expectations of future performance given the rapidly
evolving markets; condition of the global financial and credit
market; the uncertain regulatory landscape in China; fluctuations in the Company's quarterly
operating results; the Company's reliance on online advertising
sales and value-added services for a majority of its revenues;
failure to successfully develop, introduce, drive adoption of or
monetize new features and products; failure to enter and develop
the small and medium enterprise market by the Company or through
cooperation with other parties; failure to successfully integrate
acquired businesses; risks associated with the Company's
investments, including equity pick-up and impairment; and failure
to compete successfully against new entrants and established
industry competitors. Further information regarding these and other
risks is included in SINA's annual report on Form 20-F for the year
ended December 31, 2016 and its other
filings with the SEC. Past performance is not necessarily
indicative of future results. Given these uncertainties, you should
not place undue reliance on these forward-looking statements. The
information in this letter is provided only as of the date hereof,
and SINA assumes no obligation to update its forward-looking
statements in this letter or elsewhere, except as required by
law.
Contacts
Investor Relations
SINA Corporation
Phone: 8610-5898 3336
Email: ir@staff.SINA.com.cn
Larry Miller / Scott Winter
Innisfree M&A Incorporated
Phone: 212-750-5833
Media
Ed Trissel / Nick Lamplough
Joele Frank, Wilkinson Brimmer
Katcher
Phone: 212-355-4449
1 Based on SINA's closing share price on October 2, 2017. Source: Bloomberg.
2 Value based on Weibo closing share price as of
October 2, 2017. Source:
Bloomberg.
3 Source: S&P Global Ratings. "Research Update:
People's Republic of China Ratings Lowered to 'A+/A-1'; Outlook
Stable." September 21, 2017.
Permission to use the quotation neither sought nor obtained.
4 Based on SINA's closing share price on May 29, 2015. Source: Bloomberg.
5 Based on SINA's closing share price on May 29, 2015 and October
2, 2017. Source: Bloomberg.
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SOURCE SINA Corporation