BEIJING, Sept. 29, 2020 /PRNewswire/ -- Sogou Inc. (NYSE:
SOGO) ("Sogou" or the "Company"), an innovator in search and a
leader in China's internet
industry, today announced that it has entered into a definitive
Agreement and Plan of Merger (the "Merger Agreement") with THL A21
Limited ("THL"), TitanSupernova Limited ("Parent"), and
Tencent Mobility Limited ("TML")
(THL, Parent, and TML, collectively, the "Tencent Parties"), each of which is a direct or
indirect wholly-owned subsidiary of Tencent Holdings Limited ("Tencent"), pursuant to which Parent will be
merged with and into the Company in an all-cash transaction (the
"Merger"), and the Company will become an indirect wholly-owned
subsidiary of Tencent.
Upon the effectiveness of the Merger, outstanding Class A
ordinary shares of the Company (each a "Class A Ordinary Share"),
including Class A Ordinary Shares represented by American
depositary shares ("ADSs"), other than Excluded Shares (as defined
in the Merger Agreement) and ADSs representing Excluded Shares,
will be cancelled in exchange for the right for the holders thereof
to receive $9.00 in cash per share or
ADS (the "Merger Consideration").
Also pursuant to the Merger Agreement, each outstanding and
fully-vested option (each, a "Vested Option") to purchase Class A
Ordinary Shares will be cancelled simultaneously with the
effectiveness of the Merger in exchange for the holder's right to
receive an amount in cash determined by multiplying (x) the excess,
if any, of $9.00 over the applicable
exercise price of such Vested Option by (y) the number of Class A
Ordinary Shares underlying such Vested Option. Each outstanding
option to purchase Class A Ordinary Shares that is not vested
(each, an "Unvested Option") will be cancelled simultaneously with
the effectiveness of the Merger in exchange for the holder's right
to receive a restricted cash award ("RCA") in an amount in cash
that is the equivalent of the product of (i) the excess, if any, of
$9.00 over the applicable exercise
price of such Unvested Option, and (ii) the number of Class A
Ordinary Shares underlying such Unvested Option. Outstanding
Restricted Shares (as defined in the Merger Agreement), including
Restricted Shares represented by ADSs, will be cancelled
simultaneously with the effectiveness of the Merger in exchange for
the holder's right to receive an RCA in an amount of $9.00 cash per Restricted Share. RCAs so issued
will continue to be subject to the same vesting conditions as were
applicable to the corresponding Unvested Options and Restricted
Shares.
The Merger Consideration represents a premium of approximately
56.5% to the closing trading price of the ADSs on July 24,
2020, the last trading day prior to the Company's announcement of
its receipt of a "going-private" proposal from Tencent, and a premium of 83.0% to the
volume-weighted average price during the last 30 trading days prior
to the Company's receipt of the "going-private" proposal.
The Company's board of directors (the "Board"), acting upon the
unanimous recommendation of a committee of independent and
disinterested directors established by the Board (the "Special
Committee"), approved the Merger Agreement and the Merger. The
Special Committee negotiated the terms of the Merger Agreement with
the assistance of its financial and legal advisors.
On or about the same time as the Company entered into the Merger
Agreement, Sohu.com Limited ("Sohu") (NASDAQ: SOHU), which is
currently the Company's indirect controlling shareholder through
Sohu's wholly-owned subsidiary Sohu.com (Search) Limited ("Sohu
Search"), and Sohu Search entered into a share purchase agreement
with Parent, pursuant to which Sohu Search has agreed to sell all
of the Class A Ordinary Shares and Class B ordinary shares of the
Company (each a "Class B Ordinary Share") owned by it to Parent
(the "Share Purchase"). Also on or about the same time, THL and
Parent entered into a contribution agreement, pursuant to which THL
has agreed to contribute all of the Class B Ordinary Shares of the
Company owned by it to Parent (the "Share Contribution").
Each of the closing of the Share Purchase and the closing of the
Share Contribution is expected to take place shortly prior to the
completion of the Merger.
Following the completion of the Share Purchase and the Share
Contribution, Parent will hold not less than 90% of the voting
power represented by all issued and outstanding shares of the
Company. Accordingly, it is intended that the Merger will be in the
form of a short-form merger of Parent with and into the Company in
accordance with section 233(7) of the Companies Law of the
Cayman Islands, and shareholder
approval of the Merger Agreement and the Merger will not be
required.
The Merger is currently expected to close in the fourth quarter
of 2020. If completed, the Merger will result in the Company
becoming a privately–held indirect wholly-owned subsidiary of
Tencent, the Company's ADSs will no
longer be listed on the New York Stock Exchange, and the ADS
program will be terminated.
Duff & Phelps, LLC is serving as independent financial
advisor to the Special Committee and Goulston & Storrs PC is
serving as U.S. legal counsel to the Special Committee.
The validity of the Merger and certain other legal matters with
respect to Cayman Islands law are
being passed upon and advised for the Company by Conyers Dill & Pearman.
Goldman Sachs (Asia) L.L.C. is
serving as financial advisor to the Tencent Parties and Davis
Polk & Wardwell LLP is serving as U.S. legal counsel to
the Tencent Parties.
The validity of the Merger and certain other legal matters with
respect to Cayman Islands law are
being passed upon and advised for the Tencent Parties by Walkers (Hong Kong).
Additional Information About the Merger
The Company will furnish to the U.S. Securities and Exchange
Commission (the "SEC") a current report on Form 6-K regarding the
Merger, which will include as an exhibit thereto the Merger
Agreement. All parties desiring details regarding the Merger are
urged to review these documents, which will be available at the
SEC's website (http://www.sec.gov).
In connection with the Merger, the Company will prepare, file
with the SEC, and mail to the Company's shareholders and ADS
holders a Schedule 13E-3 Transaction Statement (the "Schedule
13E-3"). The Schedule 13E-3 will be filed with the SEC.
Prospective investors and current shareholders of the Company
are urged to read carefully and in their entirety the Schedule
13E-3 and other materials when they become available, as they will
contain important information about the Company, the Merger, and
related matters. In addition to receiving the Schedule 13E-3 by
mail, shareholders also will be able to obtain these documents, as
well as other filings containing information about the Company, the
Merger, and related matters, without charge from the SEC's website
(http://www.sec.gov) or at the SEC's public reference room at 100 F
Street, NE, Room 1580, Washington,
D.C. 20549.
Safe Harbor Statement
This announcement includes statements that constitute
"forward-looking statements" within the meaning of Section 21E of
the Securities Exchange Act of 1934. Actual results could differ
materially from those referred to in any such forward-looking
statements because of risks and uncertainties, including the
possibility that the Merger will not occur as planned if events
arise that result in the termination of the Merger Agreement, or if
one or more of the various closing conditions to the Merger are not
satisfied or waived, and other risks and uncertainties regarding
the Merger Agreement and the Merger that will be discussed in the
Schedule 13E-3 to be filed with the SEC.
About Sogou
Sogou Inc. (NYSE: SOGO) is an innovator in search and a leader
in China's internet industry. With a mission to make it
easy to communicate and get information, Sogou has grown to become
the second-largest search engine by mobile queries and the fourth
largest internet company by MAU in China. Sogou has a wide
range of innovative products and services, including the Sogou
Input Method, which is the largest Chinese language input software
for both mobile and PC. Sogou is also at the forefront of AI
development and has made significant breakthroughs in voice and
image technologies, machine translation, and Q&A, which have
been successfully integrated into our products and services.
For investor enquiries, please contact:
Jessie Zheng
Sogou
Investor Relations
Tel: +86 10 5689 8068
Email: ir@sogou-inc.com
For media enquiries, please contact:
Serena Liu
Sogou Public
Relations
Tel: +86 10 5689 9999 (61958)
Email: press@sogou-inc.com
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SOURCE Sogou Inc.