BEIJING, Oct. 20, 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
Institutional Shareholder Services ("ISS"), the leading independent
proxy advisory firm, recommends SINA shareholders vote "FOR" SINA's
director nominee, Yichen Zhang, in
connection with the Company's upcoming 2017 Annual General Meeting
of Shareholders ("Annual General Meeting") to be held on
November 3, 2017.
In addition, ISS recommended that SINA shareholders vote
"AGAINST" the election of one of Aristeia's nominees, Brett Krause. SINA continues to believe that the
Company's shareholders should vote "AGAINST" the election of both
Aristeia nominees, Mr. Krause and Thomas
Manning.
Commenting on the October 19, 2017
report from ISS, SINA issued the following
statement1:
In recommending SINA shareholders
vote "FOR" Yichen Zhang, we are
pleased ISS recognizes that "Zhang's experience as a leader in
China's alternative investment
industry as well as a member of the previous Eleventh and current
Twelfth National Committee of the Chinese People's Political
Consultative Conference seems especially valuable."
In recommending SINA shareholders
vote "AGAINST" one of Aristeia's nominee, Brett Krause, we are pleased that ISS recognized
Mr. Krause's significant conflicts of interest and lack of public
company Board experience. ISS indicates that "[Mr. Krause's] firm's
involvement in the development of companies competing in the social
media space (Momo and Inke are two examples, though the firm is
purportedly trimming the latter position), the risk for conflict is
of some concern. Of greater concern is Krause's lack of public
board experience. Since the company is subject to a high degree of
regulation by the PRC, prior public board experience in
China seems to be an important
risk mitigant at the present moment." We agree with ISS' assessment
and reiterate ISS' recommendation to vote "AGAINST" the election of
Mr. Krause.
However, we disagree with ISS'
decision to support the election of Aristeia nominee, Thomas Manning. SINA continues to strongly
recommend that shareholders vote "AGAINST" the election of Mr.
Manning, as he does not bring any additional skills or experience
that is not already well-represented on the SINA Board of
Directors. In addition, governance experts, including ISS,
recognize that directors who sit on too many boards are unable to
commit sufficient focus to their responsibilities and thus
emphasize that adding overboarded directors is not in the best
interests of shareholders. Mr. Manning is already overly committed
in serving on the boards or holding executive positions at eight
companies, including as Chairman or as a Committee member at three
companies, and he is also a lecturer at a university. We question
how Mr. Manning would have the time or capacity to serve as an
effective director on yet another Board.
Importantly, ISS recognizes that
there are significant flaws in Aristeia's proposals, which it
acknowledges may be taken from the typical 'activist playbook.'
With regard to Aristeia's proposals, which we believe are
inherently risky and potentially value destructive, ISS agrees
"there are possible regulatory challenges and viable
counterarguments facing each of the dissident's four proposals."
These are the very same objections we raised with Aristeia when the
SINA Board first began discussions regarding Aristeia's
proposals.
ISS states the following regarding
each of the Aristeia proposals:
- "Selling SINA to a third party: Selling the company to a
non-Chinese third party seems to be a non-starter (assuming that
the company intends to continue operating as a media company within
the PRC) given that TMT is considered a sensitive industry critical
to national security, and is therefore subject to national security
review procedures for M&A transactions involving non-Chinese
investors."
- "Splitting off SINA's Weibo stake: A transaction involving a
change of control of Weibo could be subject to the national
security and antitrust enforcement provisions noted above.
Sacrificing SINA's control of Weibo could compromise the synergies
realized by SINA's present dual-platform business model and
negatively impact the core business..."
- "Negotiating a reverse merger: Here, Alibaba's stake in Weibo
could present a hurdle, since the possibility of Alibaba becoming
the combined company's largest shareholder may provoke antitrust
issues.
- "Increasing buybacks: The company has extended its 2016 share
buyback program, which has approximately USD
474 million of capacity remaining through June 2018. Whether the dissident intends that the
company should accelerate the current buyback program, increase
authorizations, or both, is unclear. However, it is reasonable that
the company would wait to conduct future buybacks on a price dip,
and at the same time conduct repurchases in a measured way that
seeks to avoid running afoul of CPC efforts to rein in corporate
leverage."
- "While none of the proposals above should necessarily be
precluded from exploration, it seems that the two most accessible
alternatives—SINA share buybacks and partial Weibo share
distributions—are strategies that the company is already engaging
in, with the main dispute among the parties being the amount and
timing of said buybacks and distributions."
In short, the SINA Board and
management team have delivered a significant share price
appreciation of approximately 200% since Charles Chao, Chairman and CEO of SINA, made a
significant investment in SINA and became the Company's largest
shareholder2; established a successful
organic growth strategy and proven their ability to help incubate
and develop new businesses and business models, as demonstrated by
the tremendous growth and outperformance of Weibo.
Under the leadership and direction
of the current Board, SINA continues to successfully execute its
strategic plan, deliver strong financial results, drive growth and
create substantial value for all shareholders. The SINA Board of
Directors consists of highly qualified directors who are committed
to acting in shareholders' best interests and have been carefully
selected to ensure the right mix of skills and expertise that is
critical to overseeing a leading publicly-traded online media
company in China.
In contrast, Aristeia and its two
nominees lack the relevant and additional skills, experience and
understanding of SINA, China's
regulation environment, and public companies operations in the
Internet and online media industries in China. 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.
Do not risk jeopardizing our
momentum and the substantial returns that you continue to enjoy. We
ask for your support in this important election so that we can
continue to deliver long-term sustainable value to all of SINA's
shareholders.
SINA shareholders are reminded that their vote is extremely
important, no matter how many shares they own. The SINA Board
unanimously urges shareholders to protect the value of their
investment by voting "FOR" Yichen
Zhang and "AGAINST" each of Aristeia's nominees on
the WHITE proxy card and to discard any blue proxy
card or other proxy materials you may receive from Aristeia. If you
have already returned a blue proxy card, you can change your vote
by signing, dating and returning a WHITE proxy card
TODAY. Only your latest dated proxy card will be
counted.
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
United States 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 press release 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 press release is provided only as of the date
hereof, and SINA assumes no obligation to update its
forward-looking statements in this press release or elsewhere,
except as required by law.
1 Permission to use quotations neither sought nor
obtained.
2 Based on SINA's closing share price on
May 29, 2015 and October 19, 2017. Source: Nasdaq.
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
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SOURCE SINA Corporation