Fanhua Announces Receipt of Non-Binding Going Private Proposal
December 16 2021 - 8:23AM
Fanhua Inc. (“Fanhua” or “the Company”) (Nasdaq: FANH), a leading
independent financial services provider in China, today announced
that its Board of Directors has received a preliminary non-binding
proposal letter dated December 16, 2021, from a consortium (the
“Consortium”) led by Mr. Yinan Hu, founder and a director of the
Company, to acquire all of the outstanding ordinary shares of the
Company not already owned by the Consortium for $9.8 per American
Depositary Shares (“ADS”), or $0.49 per ordinary share in a going
private transaction, (the “Proposed Transaction”), subject to
certain conditions. The price represents a premium of
approximately 10.2% to the closing price of the Company's ADS
on December 15, 2021. Mr. Hu currently beneficially owns
approximately 18.6% of the Company’s outstanding ordinary shares.
According to the proposal letter, Mr. Yinan Hu
will form an acquisition vehicle for the purpose of implementing
the Proposed Transaction, which may admit other existing
shareholders of the Company and equity investors as consortium
members (the “Potential Consortium Members”) and the acquisition is
intended to be financed by a combination of debt and/or equity
capital from the Potential Consortium Members. A copy of the
proposal letter is attached hereto as Exhibit A.
The Board intends to form a special committee
consisting of independent directors to consider the Proposed
Transaction. The Board of Directors cautions the Company's
shareholders and others considering trading in its securities that
no decisions have been made with respect to the Company's response
to the proposal. There can be no assurance that any definitive
offer will be made, that any agreement will be executed or that
this or any other transaction will be approved or consummated. The
Company does not undertake any obligation to provide any updates
with respect to this or any other transaction, except as required
by applicable law.
About Fanhua
Inc.
Fanhua Inc. is a leading independent financial
services provider. Through our online platforms and offline sales
and service network, we offer a wide variety of financial products
and services to individuals, including life and property and
casualty insurance products. We also provide insurance claims
adjusting services, such as damage assessments, surveys,
authentications and loss estimations, as well as value-added
services, such as emergency vehicle roadside assistance.
Our online platforms include: (1) Lan Zhanggui,
an all-in-one platform which allows our agents to access and
purchase a wide variety of insurance products, including life
insurance, auto insurance, accident insurance, travel insurance and
standard health insurance products from multiple insurance
companies on their mobile devices; (2) Baowang (www.baoxian.com),
an online entry portal for comparing and purchasing health,
accident, travel and homeowner insurance products and (3) eHuzhu
(www.ehuzhu.com), a non-profit online mutual aid platform in
China.
As of September 30, 2021, our distribution and
service network is consisted of 750 sales outlets covering 23
provinces and 110 service outlets covering 31 provinces.
For more information about Fanhua Inc., please
visit http://ir.fanhuaholdings.com/.
Forward-looking Statements
This press release contains statements of a
forward-looking nature. These statements, including the statements
relating to the Company’s future financial and operating results,
are made under the “safe harbor” provisions of the U.S. Private
Securities Litigation Reform Act of 1995. You can identify these
forward-looking statements by terminology such as “will,”
“expects,” “believes,” “anticipates,” “intends,” “estimates” and
similar statements. Among other things, management's quotations and
the Business Outlook section contain forward-looking statements.
These forward-looking statements involve known and unknown risks
and uncertainties and are based on current expectations,
assumptions, estimates and projections about Fanhua and the
industry. Potential risks and uncertainties include, but are not
limited to, those relating to its ability to attract and retain
productive agents, especially entrepreneurial agents, its ability
to maintain existing and develop new business relationships with
insurance companies, its ability to execute its growth strategy,
its ability to adapt to the evolving regulatory environment in the
Chinese insurance industry, its ability to compete effectively
against its competitors, quarterly variations in its operating
results caused by factors beyond its control and macroeconomic
conditions in China, future development of COVID-19 outbreak and
their potential impact on the sales of insurance products. All
information provided in this press release is as of the date
hereof, and Fanhua undertakes no obligation to update any
forward-looking statements to reflect subsequent occurring events
or circumstances, or changes in its expectations, except as may be
required by law. Although Fanhua believes that the expectations
expressed in these forward-looking statements are reasonable, it
cannot assure you that its expectations will turn out to be
correct, and investors are cautioned that actual results may differ
materially from the anticipated results. Further information
regarding risks and uncertainties faced by Fanhua is included in
Fanhua's filings with the U.S. Securities and Exchange Commission,
including its annual report on Form 20-F.
Exhibit A
December 16, 2021
The Board of DirectorsFanhua Inc.27/F, Pearl
River Tower, No. 15 West Zhujiang RoadGuangzhou, Guangdong
510623People’s Republic of China
Dear Sirs:I, Mr. Yinan Hu (“Mr.
Hu”), founder and a director of Fanhua Inc. (the
“Company”), am pleased to submit this preliminary
non-binding proposal (the “Proposal”) to acquire
all outstanding ordinary shares of the Company that are not already
owned by a consortium led by me on the principal terms and
conditions described in this letter (the
“Transaction”).
I believe that the Proposal provides a very
attractive opportunity to the Company’s shareholders. The Proposal
represents a premium of 10.2% to the closing price of the Company’s
American depositary shares (“ADSs,” each
representing 20 ordinary shares of the Company) on December 15,
2021.
Set forth below are the key terms of the
Proposal.
- Consortium. I, together with my
affiliates, hold 18.6% of the ordinary shares of the Company. I
will form an acquisition vehicle for the purpose of implementing
the Transaction, which may admit other existing shareholders of the
Company and equity investors as consortium members (the
“Potential Consortium Members”). Please note that
I am currently interested only in pursuing the Transaction and I am
not interested in selling my shares in any other transaction
involving the Company.
- Transaction and Purchase Price. I
propose to acquire all of the outstanding ordinary shares of the
Company and ADSs not already beneficially owned by me at a purchase
price equal to US$0.49 per ordinary share, or US$9.8 per ADS, as
the case may be, in cash.
- Financing. I intend to finance the
Transaction with a combination of debt and/or equity capital.
Equity financing will be provided by me and the Potential
Consortium Members, in the form of cash and rollover equity in the
Company. Debt financing is expected to be provided by loans from
third party financial institutions. I am confident that I can
timely secure adequate financing to consummate the
Transaction.
- Due Diligence. I believe that I and
the Potential Consortium Members will be in a position to complete
customary due diligence for the Transaction in a timely manner and
in parallel with discussions on definitive agreements.
- Process. I believe that the
Transaction will provide superior value to the Company’s public
shareholders. I recognize of course that the board of directors of
the Company will evaluate the Transaction independently before it
can make its determination whether to endorse it. Given my
involvement in the Transaction, I expect that the independent
members of the board of directors will proceed to consider the
Proposal and the Transaction.
- Confidentiality. I will, as
required by law, promptly file a Schedule 13D with the Securities
and Exchange Commission to disclose this letter. I am sure you will
agree, however, that it is in all of our interests to ensure that
we otherwise proceed in a strictly confidential manner, unless
otherwise required by law, until we have executed definitive
agreements or terminated our discussions.
- No Binding Commitment. This
Proposal is not a binding offer, agreement or agreement to make a
binding offer or agreement at any point in the future. This letter
is a preliminary indication of interest of mine and does not
contain all matters upon which agreement must be reached in order
to consummate the proposed Transaction, nor does it create any
binding rights or obligations in favor of any person. The parties
will be bound only upon the execution of mutually agreeable
definitive documentation.
- Governing Law. This letter shall be
governed by, and construed in accordance with, the internal laws of
the State of New York.
In closing, I would like to express my
commitment to bring this Transaction to a successful and timely
conclusion. Should you have any questions regarding this Proposal,
please do not hesitate to contact me. I look forward to hearing
from you.
By:/s/ Yinan Hu
CONTACT: Investor Relations
Tel: (8620) 83883191
Email: qiusr@fanhuaholdings.com
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