BEIJING, Dec. 18, 2015 /PRNewswire/ -- Qihoo 360
Technology Co. Ltd. ("Qihoo 360" or the "Company") (NYSE: QIHU), a
leading Internet company in China,
today announced that it has entered into a definitive merger
agreement pursuant to which the Company will be acquired by a
consortium of investors in an all-cash transaction valued at
approximately $9.3 billion, including
the redemption of approximately $1.6
billion of debt.
Pursuant to the terms of the merger agreement, at the effective
time of the merger, each of the Company's class A and class B
ordinary shares issued and outstanding immediately prior to the
effective time of the merger (the "Shares") will be cancelled and
cease to exist in exchange for the right to receive US$51.33 in cash without interest, and each
American Depositary Share ("ADS") of the Company, every two ADSs
representing three class A ordinary shares, will be cancelled in
exchange for the right to receive US$77.00 in cash without interest, except for (a)
certain Shares (including Shares represented by ADSs) owned by
entities controlled by Mr. Hongyi
Zhou, chairman and chief executive officer of the Company,
and Mr. Xiangdong Qi, director and
president of the Company, and the Company treasury shares, which
will be cancelled and cease to exist and no payment or distribution
will be made with respect thereto, and (b) Shares held by
shareholders who have validly exercised and not effectively
withdrawn or lost their rights to dissent from the merger pursuant
to Section 238 of the Companies Law of the Cayman Islands (the "Dissenting Shares"),
which will be cancelled and cease to exist in exchange for the
right to receive the payment of fair value of the Dissenting Shares
in accordance with Section 238 of the Companies Law of the
Cayman Islands.
The merger consideration represents a premium of 16.6% to the
closing price of the Company's ADSs on June
16, 2015, the last trading day prior to the Company's
announcement of its receipt of a "going-private" proposal, and a
premium of 32.7% to the average closing price of the Company's ADSs
during the 30 trading days prior to its receipt of a
"going-private" proposal.
The investor consortium includes, among others, Citic Guoan,
Golden Brick Silk Road Capital, Sequoia Capital China, Taikang Life
Insurance, Ping An Insurance, Sunshine Insurance, New China
Capital, Huatai Ruilian, Huasheng Capital or their affiliated
entities.
The consortium intends to fund the merger through a combination
of cash contributions from the investors pursuant to equity
commitment letters, and the proceeds from a committed term loan
facility in an amount up to the RMB equivalent of US$3.0 billion and a bridge loan facility of up
to the RMB equivalent of US$400
million, pursuant to certain debt commitment letters
provided by China Merchants Bank Co., Ltd.
The Company's board of directors (the "Board"), acting upon the
unanimous recommendation of a committee of independent and
disinterested directors established by the Board (the "Special
Committee"), approved the merger agreement and the merger and
resolved to recommend that the Company's shareholders vote to
authorize and approve the merger agreement and the merger. The
Special Committee negotiated the terms of the merger agreement with
the assistance of its financial and legal advisors.
The merger, which is currently expected to close during the
first half of 2016, is subject to customary closing conditions
including the approval of the merger agreement by an affirmative
vote of holders of Shares representing at least two-thirds of the
voting power of the Shares present and voting in person or by proxy
at a meeting of the Company's shareholders which will be convened
to consider the approval of the merger agreement and the merger.
Global Village Associates Limited, an entity controlled by Mr.
Hongyi Zhou, and Young Vision Group
Limited, an entity controlled by Mr. Xiangdong Qi, have agreed to vote all of the
Shares they beneficially own, which represent approximately 61% of
the voting rights attached to the outstanding Shares as of the date
of the merger agreement, in favor of the authorization and approval
of the merger agreement and the merger. If completed, the merger
will result in the Company becoming a privately-held company and
its ADSs will no longer be listed on the New York Stock
Exchange.
In connection with the merger, J.P. Morgan Securities
(Asia Pacific) Limited is serving
as financial advisor to the Special Committee; Skadden, Arps,
Slate, Meagher & Flom LLP is serving as U.S. legal counsel to
the Special Committee; Maples and Calder is serving as Cayman Islands legal counsel to the Special
Committee; Jun He Law Offices is serving as PRC legal counsel to
the Special Committee; and Latham & Watkins is serving as U.S.
legal counsel to the Company.
Huatai United Securities Co., Ltd. is serving as the financial
advisor to the consortium; Kirkland & Ellis LLP is serving as
U.S. legal counsel to the consortium; Fangda Partners is serving as
PRC legal counsel to the Consortium; and Conyers Dill & Pearman is serving as
Cayman Islands legal counsel to
the consortium.
Additional Information about the Transaction
The Company will furnish to the U.S. Securities and Exchange
Commission (the "SEC") a report on Form 6-K regarding the merger,
which will include as an exhibit thereto the merger agreement. All
parties desiring details regarding 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 merger, the Company will prepare and mail
a proxy statement to its shareholders. In addition, certain
participants in the merger will prepare and mail to the Company's
shareholders a Schedule 13E-3 transaction statement that will
include the proxy 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
MERGER 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
merger 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.
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 shareholders 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. 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 a 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 Qihoo 360
Qihoo 360 Technology Co. Ltd. (NYSE: QIHU) is a leading Internet
company in China. The Company is
also the number one provider of Internet and mobile security
products in China as measured by
its user base, according to iResearch. Qihoo 360 also provides
users with secure access points to the Internet via its market
leading web browsers and application stores. The Company has built
one of the largest open Internet platforms in China and monetizes its massive user base
primarily through online advertising and through Internet
value-added services on its open platform.
Forward-looking Statements
This press release contains statements that express the
Company's current opinions, expectations, beliefs, plans,
objectives, assumptions or projections regarding future events or
future results and therefore are, or may be deemed to be,
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995 (the "Act"). 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 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:
Qihoo 360 Technology Co. Ltd.
In China:
Tel: +86 10-5878-1574
E-mail: ir@360.cn
In the U.S.:
The Piacente Group, Inc.
Don Markley
Tel: (212) 481-2050
E-mail: qihu@tpg-ir.com
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SOURCE Qihoo 360 Technology Co. Ltd.