HARBIN, China, June 15, 2020 /PRNewswire/ -- China XD Plastics
Company Limited (NASDAQ: CXDC) (the "Company"), one of China's leading specialty chemical companies
engaged in the development, manufacture and sale of polymer
composite materials primarily for automotive applications, today
announced that it has entered into a definitive Agreement and Plan
of Merger (the "Merger Agreement") with Faith Dawn Limited
("Parent") and Faith Horizon Inc. ("Merger Sub"), a Nevada corporation and a wholly-owned
subsidiary of Parent.
Parent is ultimately wholly-owned by Mr. Jie Han (the "Chairman"), the chairman of board
of directors and chief executive officer of the Company. The
Chairman and XD. Engineering Plastics Company Limited, an entity
wholly-owned by the Chairman (the "Chairman SPV", collectively with
the Chairman, the "Rollover Stockholders") currently beneficially
own 33,065,054 shares of common stock, par value $0.0001 per share, of the Company (the "Common
Shares") and 1,000,000 shares of series B preferred stock, par
value $0.0001 per share, of the
Company (the "Preferred Shares"), representing approximately 70% of
the voting power and approximately 50.1% of the share capital of
the Company. Parent, Merger Sub and the Rollover Stockholders are
collectively referred to as the "Buyer Group".
Pursuant to the Merger Agreement, Parent will acquire all of the
outstanding Common Shares of the Company for a cash consideration
equal to US$1.2 per share (the
"Merger Consideration"). This amount represents a premium of 25%
over the Company's closing price of US$0.96 per share as quoted by NASDAQ Global
Market (the "NASDAQ") on May 7, 2020,
the last trading day prior to the date that the Company received a
non-binding "going private" proposal from members of the Buyer
Group. The Merger Consideration also represents an increase of
approximately 9.1% over the US$1.1
per share initially offered by the Buyer Group in their initial
"going-private" proposal on May 7,
2020 and a premium of approximately 15.4% over the Company's
closing price of US$1.04 per share on
June 12, 2020, the last trading day
prior to this press release.
Subject to the terms and conditions of the Merger Agreement, at
the effective time of the merger, Merger Sub will merge with and
into the Company, with the Company continuing as the surviving
corporation and a wholly-owned subsidiary of Parent (the "Merger"),
and each of the Common Shares issued and outstanding immediately
prior to the effective time of the Merger will be cancelled and
cease to exist in exchange for the right to receive the Merger
Consideration of US$1.2 per share in
cash, without interest and net of any applicable withholding tax,
except for (i) Common Shares and Preferred Shares held by any of
Parent, Merger Sub, the Rollover Stockholders and any of their
respective affiliates; (ii) Common Shares held by the Company or
any its wholly owned subsidiary (or held in the Company's
treasury), and (iii) Common Shares reserved (but not yet allocated)
for issuance, settlement and allocation upon exercise or vesting of
the Company share awards. Pursuant to Nevada Revised Statutes
92A.390(1), there are no rights of dissent available to the holders
of Common Shares in connection with the Merger.
The Company's board of directors, acting on the recommendation
of a special committee of independent and disinterested directors
(the "Special Committee"), unanimously approved the Merger
Agreement and the transactions contemplated by the Merger
Agreement, including the Merger, and resolved to recommend that the
Company's stockholders vote to authorize and approve the Merger
Agreement and the transactions contemplated by the Merger
Agreement, including the Merger. The Special Committee, which is
composed solely of independent directors of the Company who are
unaffiliated with any member of the Buyer Group or management of
the Company, exclusively negotiated the terms of the Merger
Agreement with the Buyer Group with the assistance of its
independent financial and legal advisors.
The Merger, which is currently expected to close during the
third quarter of 2020, is subject to various closing conditions,
including the adoption of the Merger Agreement by the Company's
stockholders. Pursuant to the Merger Agreement, adoption of the
Merger Agreement and the transactions contemplated by the Merger
Agreement, including the Merger, by the Company's stockholders
requires (i) the affirmative vote (in person or by proxy) of the
holders of at least a majority of the voting power of the
outstanding Common Shares and Preferred Shares, voting together as
a single class, with the holders of Preferred Shares being entitled
to an aggregate of 40% of the combined voting power of the entire
share capital of the Company, and (ii) the affirmative vote (in
person or by proxy) or consent of the holders of at least a
majority of the outstanding Preferred Shares, voting as a single
class. The Company will call a meeting of stockholders for the
purpose of voting on the adoption of the Merger Agreement and the
transactions contemplated by the Merger Agreement as soon as
practicable. If completed, the Merger will, under laws of the
State of Nevada, result in the
Company becoming a privately-held company and the Common Shares of
the Company would no longer be listed on the NASDAQ.
Hogan Lovells is serving as U.S. legal counsel to the Special
Committee, Duff & Phelps, LLC is serving as the financial
advisor to the Special Committee. Wilson Sonsini Goodrich&
Rosati, Professional Corporation is serving as U.S. legal counsel
to the Company.
O'Melveny & Myers LLP is serving as legal advisor to the
Buyer Group.
Additional Information about the Merger
The Company will file with the Securities and Exchange
Commission (the "SEC") a report on Form 8-K regarding the proposed
transactions described in this press release, which will include as
an exhibit thereto the Merger Agreement and ancillary transaction
documents. All parties desiring details regarding the transactions
contemplated by the Merger Agreement, including 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 special meeting of the stockholders of
the Company to be held to approve the Merger, the Company will
prepare and mail a proxy statement to its stockholders. In
addition, certain participants in the Merger will prepare and mail
to the Company's stockholders a Schedule 13E-3 transaction
statement. These documents will be filed with or furnished to the
SEC. INVESTORS AND STOCKHOLDERS ARE URGED TO READ CAREFULLY AND IN
THEIR ENTIRETY THESE MATERIALS AND OTHER MATERIALS FILED WITH OR
FURNISHED TO THE SEC WHEN THEY BECOME AVAILABLE, AS THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT AND RELATED MATTERS. In
addition to receiving the proxy statement and Schedule 13E-3
transaction statement by mail, stockholders 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). In
addition, stockholders will also be able to obtain these documents,
without charge, by contacting the Company at the following address
and/or telephone number:
Address: 13620 38th Avenue, Suite 3A-1, Room 105, Flushing, New York 11354, United States
Attention: Mr. Taylor Zhang
Tel: +1 (212) 747-1118
The Company and certain of its directors, executive officers and
other members of management and employees may, under SEC rules, be
deemed to be "participants" in the solicitation of proxies from the
Company's stockholders with respect to the Merger. Information
regarding the persons who may be considered "participants" in the
solicitation of proxies will be set forth in the proxy statement
and Schedule 13E-3 transaction statement relating to the Merger
when it is filed with the SEC. Information regarding certain of
these persons and their beneficial ownership of the shares of the
Company as of December 31, 2019 is also set forth in the
Company's Form 10-K, which was filed with the SEC on June 1,
2020. Additional information regarding the interests of such
potential participants will be included in the proxy statement and
Schedule 13E-3 transaction statement and the other relevant
documents filed with the SEC when they become available.
This press release is neither a solicitation of proxy, an offer
to purchase nor a solicitation of an offer to sell any securities
and it is not a substitute for any proxy statement or other filings
that may be made with the SEC should the Merger proceed.
About China XD Plastics Company Limited
China XD Plastics Company Limited, through its wholly-owned
subsidiaries, develops, manufactures and sells polymer composites
materials, primarily for automotive applications. The Company's
products are used in the exterior and interior trim and in the
functional components of 31 automobile brands manufactured in
China, including without
limitation, Audi, Mercedes Benz,
BMW, Toyota, Buick, Chevrolet, Mazda, Volvo, Ford, Citroen, Jinbei
and VW Passat, Golf, Jetta, etc. The Company's wholly-owned
research center is dedicated to the research and development of
polymer composites materials and benefits from its cooperation with
well-known scientists from prestigious universities in China. As of December
31, 2019, 633 of the Company's products have been certified
for use by one or more of the automobile manufacturers in
China. For more information,
please visit the Company's English website at
http://chinaxd.irpass.com/, and the Chinese website at
http://www.xdholding.com.
Cautionary Statement Regarding Forward-Looking
Statements
All statements included in this press release, other than
statements or characterizations of historical fact, are
forward-looking statements. These forward-looking statements are
based on our current expectations, estimates and projections about
our industry, management's beliefs, and certain assumptions made by
us, all of which are subject to change. Forward-looking statements
can often be identified by words such as "anticipates," "expects,"
"intends," "plans," "predicts," "believes," "seeks," "estimates,"
"may," "will," "should," "would," "could," "potential," "continue,"
"ongoing," similar expressions, and variations or negatives of
these words. These forward-looking statements are not guarantees of
future results and are subject to factors, risks, uncertainties and
assumptions that could cause our actual results to differ
materially and adversely from those expressed in any
forward-looking statement, including (but not limited to): (1) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the Merger Agreement, (2) the
inability to consummate the Merger due to the failure to obtain
stockholder approval for the adoption of the Merger Agreement or
the failure to satisfy other conditions to completion of the
proposed transaction, (3) risks related to the disruption of
management's attention from the Company's ongoing business
operations due to the proposed transaction and (4) the effect of
the announcement of the proposed transaction on the Company's
relationships with its customers, suppliers and business
generally.
The forward-looking statements included in this press release
speak only as of the date hereof. Additional discussions of factors
affecting the Company's business and prospects are reflected under
the caption "Risk Factors" and in other sections of the Company's
Annual Report on Form 10-K for the Company's fiscal year ended
December 31, 2019, and other filings
made with the SEC. The Company expressly disclaims any intent or
obligation to update any forward-looking statements, whether
written or oral, that may be made from time to time by or on behalf
of the Company or its subsidiaries, whether as a result of new
information, changed circumstances or future events, or for any
other reason.
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SOURCE China XD Plastics Company Limited