RDA Microelectronics, Inc. (Nasdaq:RDA) ("RDA Microelectronics" or
the "Company"), a fabless semiconductor company that designs,
develops and markets wireless systems-on-chip and radio-frequency
(RF) semiconductors for cellular, connectivity and broadcast
applications, today announced that its Board of Directors (the
"Board") received a preliminary, non-binding proposal letter (the
"Unigroup Proposal") from Tsinghua Unigroup Ltd. ("Unigroup"), an
operating subsidiary of Tsinghua Holdings Co. Ltd., a solely
state-owned limited liability corporation funded by Tsinghua
University in China, pursuant to which Unigroup proposes to acquire
the Company for US$18.00 in cash per American Depositary Share of
the Company (the "ADSs," each ADS representing six ordinary shares
of the Company). A copy of the proposal letter is attached hereto
as Appendix 1.
At the time of its delivery of the Unigroup Proposal to the
Board on October 25, 2103, Unigroup requested the Board to refrain
from disclosing the Unigroup Proposal to the public during a 21-day
period and indicated to the Board that Unigroup may retract the
Unigroup Proposal if the proposal was disclosed. On November
7, 2013, Unigroup notified the Board that it withdrew its
requirement for confidential treatment of the Unigroup
Proposal.
The Board is continuing its review and evaluation of the
Unigroup Proposal and the previously disclosed acquisition proposal
from Shanghai Pudong Science and Technology Investment Co.,
Ltd. No decision has been made with respect to the Company's
response to either proposal or other potential strategic
alternatives. 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 either proposal or any other
transaction, except as required under applicable
law.
About RDA Microelectronics
RDA Microelectronics is a fabless semiconductor company that
designs, develops and markets wireless system-on-chip and
radio-frequency semiconductors for cellular, connectivity and
broadcast applications. The Company's product portfolio currently
includes baseband, radio-frequency front-end modules, power
amplifiers, transceivers, Bluetooth system-on-chip, Wi-Fi,
Bluetooth and FM combo chips, FM radio receivers, set-top box
tuners, analog mobile television receivers, CMMB mobile television
receivers, walkie-talkie transceivers and LNB satellite down
converters. For additional information, please see the Company's
website at http://www.rdamicro.com.
Appendix 1 – Unigroup Proposal
Friday October 25th, 2013
The Board of Directors RDA Microelectronics, Inc. 6/F Building
4, 690 Bibo Road Pudong District, Shanghai, 201203 People's
Republic of China
Subject: Non-Binding Proposal to Acquire RDA
Microelectronics
Ladies and Gentlemen:
Tsinghua Unigroup Ltd. ("Unigroup"), a subsidiary of Tsinghua
University, is pleased to submit this preliminary, non-binding
proposal to acquire RDA Microelectronics, Inc. (the "Company," and
such transaction the "Acquisition").
We believe that our proposal as outlined below will provide a
very attractive alternative to the Company's shareholders. Our
proposed price of $18.00 per ADS represents a 16.13% premium to the
$15.50 per ADS offer received by the Company on September 27th,
2013. Our proposal of $18.00 per ADS also represents a premium of
51.55% to the same 60 trading day volume-weighted average closing
ADS price referenced in the non-binding offer received by the
Company on September 27th, 2013.
In addition to the large premium that our proposal would deliver
to RDA shareholders, we believe that an Acquisition by Tsinghua
Unigroup Ltd., which is majority owned by Tsinghua University, a
central player in China's technology and R&D sectors, would
provide excellent strategic synergies and position the Company for
compelling value creation in key wireless communications markets in
China and elsewhere going forward.
The terms and conditions upon which we are prepared to pursue
the Acquisition are set forth below. Because of our conviction and
readiness to act quickly and decisively should the Board accept our
proposal, we have carefully prepared this proposal to provide a
high level of detail in our terms and conditions. We are confident
in our ability to consummate an Acquisition as described in this
letter.
1. Purchase Price. The
consideration payable for each American Depositary Share of the
Company ("ADS," each representing six (6) ordinary shares) will be
U.S. $18.00 in cash.
2. Timeline. If facilitated
by the Company, we would prepare and plan to execute Definitive
Agreements within three (3) weeks, or sooner if the Company is
prepared to expedite our diligence review and negotiations. We
have engaged Morrison & Foerster LLP to advise us in connection
with this offer and they are prepared to engage
immediately. If accepted, we are also confident we can close
our proposed transaction quickly after shareholder approval is
received.
3. Definitive Agreements. We
are prepared to negotiate and finalize definitive agreements (the
"Definitive Agreements") concurrently with our due diligence
review. This proposal is subject to execution of Definitive
Agreements.
4. Escrow. Based on our
confidence and decisiveness, our proposal would also provide a
reverse termination fee in a RMB escrow of up to 270 million RMB,
provided that the Company would agree to an escrowed Company
termination fee of the same amount. Our reverse termination
fee would cover our funding risks and PRC government approval risks
including MIIT, NDRC, and MOC. We would fund such RMB escrow
upon receipt of shareholder approval for the proposed transaction,
provided the Company also funds its equivalent Company termination
fee.
5. Funding. Although we are
confident of our equity funding for the total purchase price of
approximately US$890 million, we may consider financing a portion
of the aggregate purchase price with debt funding. If
Definitive Agreements are finalized, we would intend, at that time,
to provide a guarantee for full funding by Tsinghua Holdings Co.
Ltd., our controlling shareholder. This guarantee for full
funding would apply to any equity or debt financing that may be
required for the Acquisition.
6. Due Diligences. We have
already retained advisors and are in a position to commence our due
diligence for the Acquisition immediately and upon receiving access
to the relevant materials.
7. Confidentiality. We
request and are confident you will agree with us that we have a
shared interest in proceeding in a confidential manner, unless
otherwise required by law, until we have executed Definitive
Agreements.
8. Further Information About
Tsinghua Holdings and Tsinghua Unigroup. Unigroup is an
operating subsidiary of Tsinghua Holdings, a solely state-owned
limited liability corporation funded by Tsinghua University that is
responsible for managing a substantial majority of Tsinghua
University's commercial assets. As of December 31st, 2012,
Tsinghua Holdings' total assets approximated 70.4 billion RMB and
had EBITDA of approximately 4.07 billion RMB and net income of
approximately 1.45 billion RMB for fiscal 2012. Tsinghua
Holdings' corporate credit rating is AA+ according to CCXI, the
Chinese domestic JV partner of Moody's and the leading credit
rating agency in China. Additional information about Tsinghua
Holdings can be found at
(http://www.thholding.com.cn/english/simpleindex.aspx). The
other shareholder of Unigroup is Beijing Jiankun Investment Group
Co. Ltd. Unigroup's business lines include high-technology,
bio-technology, science park development, and urban infrastructure
construction.
9. No Binding
Commitment. This letter constitutes only a preliminary
indication of our interest, and does not constitute any binding
commitment with respect to an Acquisition. Such a commitment
will arise only upon execution of Definitive Agreements, and in
such case will be on the terms provided in such documentation.
In closing, we would like to personally express our commitment
to working together in bringing this Acquisition to a successful
and timely conclusion.
We look forward to hearing from you regarding our proposal at
your earlier convenience with a target of Definitive Agreements
being executed by mid November.
Very truly yours,
Tsinghua Unigroup Ltd.
By: /s/ Zhao,
Weiguo
Name: Zhao, Weiguo Title: Chairman and President
CONTACT: Lily Dong, Chief Financial Officer
RDA Microelectronics, Inc.
+86-21-5027-1108
ir@rdamicro.com
or
Leanne Sievers, EVP
Shelton Group Investor Relations
949-224-3874
lsievers@sheltongroup.com
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