Proposal Provides Immediate and Significant
Value to China Biologic Products’ Shareholders
A consortium composed of Mr. David (Xiaoying) Gao, GL Capital
Group, Bank of China Group Investment Limited and CDH Investments
(the “Consortium”) today announced it has made a non-binding
proposal to acquire all of the outstanding common shares of China
Biologic Products Holdings, Inc. (“China Biologic” or the
“Company”) (NASDAQ: CBPO), that are not already held by the
Consortium, for US$118.00 per share in an all-cash transaction
valued at approximately US$3.9 billion. The proposal was conveyed
on August 17, 2018 in a letter to China Biologic’s Board of
Directors.
The Consortium’s proposal represents an approximate 30% premium
to China Biologic’s closing share price on August 16, 2018, and an
approximate 40% premium to the Company’s closing price on June 8,
2018, the last trading day before CITIC Capital’s proposal to
acquire the Company for US$110.00 per share was conveyed.
Commenting on its offer, the Consortium stated: “Our proposal
delivers immediate and attractive value to China Biologic’s
shareholders and provides the Company the ideal partners to support
its future growth. As a private company, China Biologic will have
the additional operational flexibility and financial support to
build on its successful track record as China’s leading plasma
player while navigating the current challenges facing the country’s
biopharma industry.”
“Our compelling proposal benefits all of China Biologic’s
stakeholders and we want to work collaboratively with the Board to
complete a transaction in an efficient and expeditious manner. We
also want to partner with the current management team as we take
the Company forward.”
The Consortium has received from Goldman Sachs (Asia) L.L.C.
(“Goldman Sachs”) a non-binding letter indicating that, subject to
the assumptions, terms and conditions in the letter and such other
matters as Goldman Sachs considers relevant, Goldman Sachs is, as
of the date of the letter, highly confident that as sole lead
arranger, sole bookrunner and sole syndication agent, the
structuring and syndication of a senior secured debt financing
could be accomplished by Goldman Sachs as part of the financing for
the acquisition described therein.
Goldman Sachs is acting as financial advisor to the Consortium,
Skadden, Arps, Slate, Meagher & Flom LLP is acting as its U.S.
legal advisor, and Conyers, Dill & Pearman is acting as its
Cayman Islands legal advisor.
Below is the text of the letter sent on August 17, 2018 to China
Biologic’s Board of Directors:
August 17, 2018
The Board of DirectorsChina Biologic Products Holdings, Inc.18th
Floor, Jialong International Building19 Chaoyang Park RoadChaoyang
District, Beijing 100125People’s Republic of China
Dear Members of the Board of Directors:
Feng Tai Global Limited, a company beneficially owned by Mr.
David (Xiaoying) Gao (“Mr. Gao”), GL Sandrose Investment
L.P., a limited partnership controlled and managed by GL Capital
Group (“GL Capital”), World Investments Limited, a company
controlled and managed by Bank of China Group Investment Limited
(“BOCGI”), and CDH Utopia Limited, a company controlled and
managed by CDH Investments (“CDH”, together with Mr. Gao, GL
Capital and BOCGI, the “Consortium”, “we” or
“us”), are pleased to submit this preliminary non-binding
proposal (“Proposal”) to acquire all the outstanding
ordinary shares of China Biologic Products Holdings, Inc. (the
“Company”) that are not already held by the members of the
Consortium (the “Acquisition”).
We believe that our Proposal provides a very attractive
opportunity for the Company’s shareholders to realize substantial
and immediate returns while ensuring long term growth and continued
investment in the Company’s business. Subject to the Company’s
agreement to redeem its rights plan, we would also welcome any
shareholders who are interested in joining our effort. Key terms of
our Proposal include:
- Consortium. Members of the Consortium intend to
form an acquisition company for the purpose of implementing the
Acquisition, and have agreed to work exclusively within the
framework of the Consortium in pursuing the Acquisition.
- Purchase
Price. The consideration payable for each ordinary share of
the Company is proposed to be $118 per ordinary share in cash (in
each case other than those ordinary shares held by the members of
the Consortium). Our proposal represents a premium of approximately
30% to the Company’s closing price on August 16, 2018, and a
premium of approximately 40% to the closing price as of June 8,
2018, the last trading day before the publication of the offer
submitted to the Board of the Company by CITIC Capital Holdings
Limited.
- Funding.
We intend to finance the Acquisition with a combination of debt and
equity capital. We have engaged Goldman Sachs (Asia) LLC
(“Goldman Sachs”) to act as our financial advisor and to
arrange the senior secured debt financing. We have received from
Goldman Sachs a highly confident letter dated the date hereof
indicating that Goldman Sachs is highly confident of its ability to
fully underwrite a senior secured credit facility for the
Acquisition as sole lead arranger, sole bookrunner and sole
syndication agent. Equity financing would be provided from and
arranged by the members of the Consortium.
- Process; Due
Diligence. We believe that the Acquisition will provide
superior value to the Company’s shareholders. We trust that the
Company’s Board of Directors will evaluate the Acquisition fairly
and independently before it can make its determination to endorse
it. We have engaged Skadden, Arps, Slate, Meagher & Flom LLP as
our U.S. legal counsel and Conyers, Dill & Pearman as our
Cayman Islands legal counsel. We believe that we will be in a
position to complete customary legal, financial and accounting due
diligence for the Acquisition in a timely manner and in parallel
with discussions on the Definitive Agreements. We believe that with
the right cooperation from the Company and its Board, we would be
able to enter into Definitive Agreements within four (4) weeks from
the start of the discussions.
- Definitive
Agreements. We are prepared to promptly negotiate and
finalize definitive agreements (the “Definitive Agreements”)
providing for the Acquisition and related transactions while
conducting our due diligence process. These documents will provide
for representations, warranties, covenants and conditions which are
typical, customary and appropriate for transactions of this
type.
- Confidentiality. Although we would have preferred
to keep our Proposal strictly private, certain members of the
Consortium will have to file with the SEC a Schedule 13D within ten
(10) calendar days of the date hereof. That filing will, as
required by law, need to disclose this letter and the formation of
the Consortium as a buyer group. Assuming we are working together
in good faith towards the Definitive Agreements, we would be
pleased to coordinate a joint press release to be issued at or
prior to the time of the Consortium’s SEC filing.
- Business and
Operations of the Company. The members of the Consortium
remain committed to continuing and building on the track record of
the Company as the leading plasma player in China. Through future
investments in research and development and in the infrastructure,
we plan not only to deliver significant returns to investors, but
importantly contribute to the improved care for patients in
China.
- Management. It is our belief that in order to
deliver on our commitments of growth, we will need and seek
continued support from the Company’s current management team. To
that end, we would like the management team to remain meaningful
shareholders in the business and we would plan, at the appropriate
time, to engage in relevant discussions with them.
- About Mr.
Gao. Mr. Gao served as the Chairman and CEO of the Company
from March and May 2012 to July 2018. During Mr. Gao’s tenure at
the Company, the market capitalization of the Company grew from
around $250 million to more than $3 billion, with diluted EPS
growing from $0.37 in 2011 before he took the office to $2.38 in
2017, representing a CAGR of 36%. Before joining the Company, Mr.
Gao served in various senior executive positions in private and
public companies in pharmaceutical and other industries, including
the CEO of BMP Sunstone Corporation (NASDAQ: BJGP), the Chairman of
the Board of Directors at BMP China, the President and CEO of
Abacus Investments Ltd., a private wealth management company, and
various executive positions at Motorola, Inc.
- About GL
Capital. GL Capital is a Greater China healthcare-focused,
value-driven investment management group. Since inception in 2010,
GL Capital has developed a reputation as the partner-of choice for
leading healthcare companies and demonstrated capability to add
value to its portfolio companies.
- About
BOCGI. BOCGI is the principal direct investment platform of
Bank of China. Established in 1984, BOCGI has made extensive
investment in various sectors benefiting from China’s economic
growth.
- About CDH.
Established in 2002, CDH is a leading China-focused alternative
asset manager with approximately US$19 billion of assets under
management. Since inception, CDH has invested in more than 200
companies and has helped more than 60 companies successfully list
on international and China's domestic stock exchanges.
- No Binding
Commitment. This letter does not contain all matters upon
which agreement must be reached in order to consummate the proposed
Acquisition described above, constitutes only a preliminary
indication of our interest, and does not constitute any binding
commitment with respect to the Acquisition. A binding commitment
will result only from the execution of Definitive Agreements, and
then will be on terms and conditions provided in such
documentation. Nothing herein shall obligate any person to engage
in or continue discussions regarding the proposed Acquisition, and
any of us may terminate discussions at any time for any reason or
no reason. Any actions taken by any person in reliance on this
Proposal shall be at that person’s own risk and cost.
- Next
Steps. We are ready to move rapidly to complete the proposed
Acquisition and are available to answer any questions regarding our
Proposal. We would like to receive a response to our Proposal from
the Company’s Board by August 27, 2018.
In closing, we would like to express our commitment to working
together to bring this Acquisition to a successful and timely
conclusion. We look forward to hearing from you.
Sincerely,
Feng Tai Global Limited/s/ David
(Xiaoying) GaoDirector
GL Sandrose Investment L.P./s/ Shirley
LinAuthorized Representative
World Investments Limited/s/ Han
LiAuthorized Representative
CDH Utopia Limited/s/Shuge
JiaoCEO
Forward-looking Statements
This communication may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, but are not limited
to, statements regarding the Consortium’s offer to acquire the
Company, its financing of the proposed transaction, its expected
future performance (including expected results of operations,
financial condition, strategy and plans). Forward-looking
statements may be identified by the use of the words “anticipates,”
“expects,” “intends,” “plans,” “should,” “could,” “would,” “may,”
“will,” “believes,” “estimates,” “potential,” “target,”
“opportunity,” “tentative,” “positioning,” “designed,” “create,”
“predict,” “project,” “seek,” “ongoing,” “upside,” “increases” or
“continue” and variations or similar expressions. These statements
are based upon the current expectations and beliefs of the
Consortium and are subject to numerous assumptions, risks and
uncertainties that change over time and could cause actual results
to differ materially from those described in the forward-looking
statements. These assumptions, risks and uncertainties include, but
are not limited to, assumptions, risks and uncertainties discussed
in the Company's most recent annual or quarterly report filed with
the Securities and Exchange Commission (the “SEC”) and assumptions,
risks and uncertainties relating to the Consortium's proposed
acquisition, which will be detailed from time to time in the
Company's and/or the Consortium's filings with the SEC, which
factors are incorporated herein by reference.
Important factors that could cause actual results to differ
materially from the forward-looking statements we make in this
communication are set forth in other reports or documents that we
file from time to time with the SEC and, and include, but are not
limited to:
- the ultimate outcome of any possible
transaction between the Consortium and the Company including the
possibilities that the Consortium will not pursue a transaction
with the Company and that the Company will reject a transaction
with the Consortium;
- if a transaction between the Consortium
and the Company were to occur, the ultimate outcome and the
effects of the transaction, including the Company’s future
financial condition, operating results, strategy and plans;
- ability to obtain regulatory approvals
and meet other closing conditions to the transaction, including all
necessary approvals from the shareholders of the Company, on a
timely basis;
- the availability and access of funds
sufficient to meet our equity and debt financing required to
consummate the transaction in a timely manner; and
- the risks and uncertainties detailed by
the Company with respect to its business as described in its
reports and documents filed with the SEC.
All forward-looking statements attributable to us or any person
acting on our behalf are expressly qualified in their entirety by
this cautionary statement. Readers are cautioned not to place undue
reliance on any of these forward-looking statements. These
forward-looking statements speak only as of the date hereof. The
Consortium undertakes no obligation to update any of these
forward-looking statements to reflect events or circumstances after
the date of this communication or to reflect actual outcomes.
Additional Information
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. This communication
relates to a preliminary non-binding proposal which the Consortium
has made for an acquisition transaction with the Company. In
furtherance of the Consortium’s acquisition proposal and subject to
future developments, the Consortium (and, if a negotiated
transaction is agreed, the Company) may file one or more proxy
statements or other documents with the SEC. This communication is
not a substitute for any proxy statement or other documents the
Consortium and/or the Company may file with the SEC in connection
with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF
THE COMPANY ARE URGED TO READ THE PROXY STATEMENT(s) AND OTHER
DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND
WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Any definitive proxy
statement(s) (if and when available) will be mailed to stockholders
of the Company, as applicable. Investors and security holders will
be able to retrieve and review, free of charge, these documents (if
and when available) and other documents filed with the SEC by the
Consortium and/or the Company through the web site maintained by
the SEC at http://www.sec.gov.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180820005272/en/
Sard Verbinnen & CoRon Low/Yin Ai+852 3842
2200RLow@sardverb.com or YAi@sardverb.comorMatt Benson/Alyssa
Linn+1 212 687 8080/+1 310 201 2040MBenson@sardverb.com or
ALinn@sardverb.com
China Bioligic Products (NASDAQ:CBPO)
Historical Stock Chart
From Jun 2024 to Jul 2024
China Bioligic Products (NASDAQ:CBPO)
Historical Stock Chart
From Jul 2023 to Jul 2024