BEIJING, May 19, 2014 /PRNewswire-FirstCall/ -- Charm
Communications Inc. (NASDAQ: CHRM) ("Charm" or the "Company"), a
leading advertising agency in China, announced today that it has entered
into an Agreement and Plan of Merger, dated May 19, 2014 (the "Merger Agreement"), with
Engadin Parent Limited ("Parent") and Engadin Merger Limited
("Merger Sub"), pursuant to which Parent will acquire Charm (the
"Transaction") at a price of US$4.70
in cash per American Depositary Share of the Company ("ADS", each
ADS representing two Class A ordinary shares of the Company), or
US$2.35 in cash per Class A ordinary
share of the Company, and US$2.35 in
cash per Class B ordinary share of the Company. This represents a
14.3% premium over the Company's 30 trading day volume-weighted
average price of $4.11 per ADS as
quoted by NASDAQ on September 27,
2013, the last trading day prior to the Company's
announcement on September 30, 2013
that it had received a "going private" proposal.
Immediately after the completion of the Transaction, Parent will
be beneficially owned by He Dang, the chairman of the board of
directors (the "Founder") and certain of his affiliates including
Merry Circle Trading Limited, a British
Virgin Islands company controlled by the Founder
("Merry Circle") and Honour Idea
Limited, a British Virgin Islands
company owned by the Founder ("Honour
Idea" and, collectively with Merry
Circle, the "Founder Shareholders"), and an investment fund
affiliated with CMC Capital Partners HK Limited (the "Sponsor" and,
collectively with Founder and Founder Shareholders, the
"Consortium"). The Consortium collectively beneficially owns
approximately 55.3% of the outstanding shares of the Company
(excluding outstanding options of the Company) and intends to fund
the Transaction, including the acquisition of ADSs and ordinary
shares of the Company not already owned by the Consortium, through
a combination of proceeds from a loan facility in the amount of
US$60,000,000 from Bank of China
Limited, London Branch, equity
financing to be provided by the Sponsor and available cash of the
Company and its subsidiaries. In connection with the Merger
Agreement, the Founder and the Founder Shareholders also have
entered into a rollover and support agreement with Parent and
Merger Sub and have agreed, among other things, to vote all of
their ordinary shares (including those represented by ADSs) in
favor of the authorization and approval of the Merger Agreement and
the Transaction.
Pursuant to the Merger Agreement, upon the terms and subject to
the conditions thereof, at the effective time of the merger the
Company will become a wholly-owned subsidiary of Parent and each of
the Company's ordinary shares issued and outstanding immediately
prior to the effective time of the merger (including ordinary
shares represented by ADSs) will be converted into the right to
receive US$2.35 in cash, without
interest, except for the ordinary shares (including ordinary shares
represented by ADSs): (i) beneficially owned by the Founder
Shareholders, which will be cancelled without receiving any
consideration in the merger, (ii) beneficially owned by the Company
or any direct or indirect wholly owned subsidiary of the Company,
and (iii) owned by holders of such ordinary shares who have validly
exercised and not lost their appraisal rights pursuant to Section
238 of the Cayman Islands Companies Law, as amended.
The Company's Board of Directors, acting upon the unanimous
recommendation of the Special Committee of Independent Directors
formed by the Board of Directors, approved the Merger Agreement and
the Transaction and resolved to recommend that the Company's
shareholders vote to approve the Merger Agreement and the
Transaction. The Special Committee, which is composed solely of
directors unrelated to any of Parent, Merger Sub, the Consortium or
any of the management members of the Company, negotiated the terms
of the Merger Agreement with the assistance of its independent
financial and legal advisors.
The Transaction, which is currently expected to close before the
end of the third quarter 2014, is subject to various closing
conditions, including a condition that the Merger Agreement and the
Transaction be authorized and approved by an affirmative vote of
shareholders representing two-thirds or more of the voting power of
the ordinary shares present and voting in person or by proxy as a
single class at a meeting of the Company's shareholders which will
be convened to consider the approval of the Merger Agreement and
the Transaction ("Shareholder Approval"). If completed, the
Transaction will result in the Company becoming a privately-held
company and its ADSs will no longer be listed on the NASDAQ Global
Market.
China Renaissance Securities (Hong
Kong) Limited is serving as financial advisor to the Special
Committee. Gunderson Dettmer Stough
Villeneuve Franklin & Hachigian LLP is serving as U.S.
legal advisor to the Special Committee and Maples and Calder is
serving as Cayman Islands legal
advisor to the Special Committee. Davis
Polk & Wardwell LLP is serving as U.S. legal advisor to
China Renaissance Securities (Hong
Kong) Limited.
Simpson Thacher & Bartlett is serving as U.S. legal advisor
to the Consortium and Conyers Dill
& Pearman is serving as Cayman
Islands legal advisor to the Consortium. Weil, Gotshal &
Manges LLP is serving as U.S. legal advisor to the Sponsor. DLA
Piper is serving as legal advisor to Bank of China Limited,
London Branch.
Go-Shop Period
The Company is permitted to initiate, solicit and encourage any
alternative acquisition proposals from third parties, and to
provide non-public information to and engage in discussions or
negotiations with third parties with respect to alternative
acquisition proposals, during a 30-day period following the
execution of the Merger Agreement (the "Go-Shop Period").
Immediately upon the expiration of the Go-Shop Period, the Company
will become subject to customary "no-shop" restrictions on its
ability to solicit alternative acquisition proposals from third
parties and to provide non-public information to and engage in
discussions or negotiations with third parties regarding
alternative acquisition proposals.
Notwithstanding the limitations applicable after the expiration
of the Go-Shop Period, prior to the receipt of Shareholder
Approval, the Company may under certain circumstances provide
information to third parties with respect to unsolicited
alternative acquisition proposals and, if the Special Committee
determines, among other things, that any acquisition proposal
constitutes or is reasonably likely to result in a superior
proposal under the Merger Agreement, participate in discussions or
negotiations with the third party that submitted the superior
proposal.
Additional Information about the Transaction
The Company will furnish to the Securities and Exchange
Commission (the "SEC") a report on Form 6-K regarding the
Transaction, which will include the Merger Agreement related to the
Transaction. All parties desiring details regarding the Transaction
are urged to review these documents, which are available at the
SEC's website (http://www.sec.gov).
In connection with the Transaction, the Company will prepare and
mail a proxy statement to its shareholders. In addition, certain
participants in the Transaction will prepare and mail to the
Company's shareholders a Schedule 13E-3 transaction statement.
These documents will be filed with or furnished to the SEC.
INVESTORS AND SHAREHOLDERS 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 TRANSACTION
AND RELATED MATTERS. In addition to receiving the proxy statement
and Schedule 13E-3 transaction statement by mail, shareholders
also will be able to obtain these documents, as well as other
filings containing information about the Company, the Transaction
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. In addition, these documents can be obtained,
without charge, by contacting the Company at the following address
and/or phone number:
Ms. Jenny Wang
IR Department
Charm Communications Inc.
Phone: +86-10-8556-2527
Email: ir@charmgroup.cn
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 our
shareholders with respect to the Transaction. 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
Transaction when it is filed with the SEC. 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 announcement 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 Transaction proceed.
About Charm
Charm Communications Inc. (NASDAQ: CHRM) is a leading
advertising agency group in China
that offers integrated advertising services with particular focus
on television and the internet. Charm's integrated advertising
services include full media planning and buying, as well as
creative and branding services. Charm has built a full service
digital advertising platform, which offers digital campaign
capabilities across all key digital media, including search
engines, display portals, online video sites and social networking
services. Charm also secures advertising inventory and other
advertising rights, such as sponsorships and branded content, from
premium media networks and resells to clients as part of its
integrated media offerings. Charm's clients include China's top domestic brands, as well as some
major international brands, across a wide range of industries.
Since 2003 Charm has been the top agency every year for
China's leading television
network, China Central Television ("CCTV"). For more information,
please go to http://ir.charmgroup.cn.
Safe Harbor and Informational Statement
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended, and as defined in the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking
statements can be identified by terminology such as "if," "will,"
"expected," and similar statements. Forward-looking statements
involve inherent risks, uncertainties and assumptions. Risks,
uncertainties and assumptions include: uncertainties as to how the
Company's shareholders will vote at the meeting of shareholders;
the possibility that competing offers will be made; the possibility
that debt financing may not be available; the possibility that
various closing conditions for the transaction may not be satisfied
or waived; and other risks and uncertainties discussed in documents
filed with the SEC by the Company, as well as the Schedule 13E-3
transaction statement and the proxy statement to be filed by the
Company. These forward-looking statements reflect the Company's
expectations as of the date of this press release. You should not
rely upon these forward-looking statements as predictions of future
events. The Company does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
For investor and media inquiries, please contact:
In China:
Ms. Jenny Wang
IR Department
Charm Communications Inc.
Phone: +86-10-8556-2527
Email: ir@charmgroup.cn
In the United States:
Mr. Justin Knapp
Ogilvy Financial, U.S.
Phone: +1-616-551-9714
Email: chrm@ogilvy.com
SOURCE Charm Communications Inc.