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YONGYE INTERNATIONAL ENTERS INTO DEFINITIVE MERGER AGREEMENT
Source: Yongye International news release

Yongye International, Inc. (NASDAQ: YONG) ("Yongye" or the "Company"), a leading developer, manufacturer and distributor of crop nutrient products in China, today announced that the Company has entered into an Agreement and Plan of Merger (the "Merger Agreement") with Full Alliance International Limited ("Holdco"), a British Virgin Islands company, Yongye International Limited ("Parent"), a Cayman Islands exempted company with limited liability, and Yongye International Merger Sub Limited, a Nevada corporation and a wholly-owned, direct subsidiary of Parent ("Merger Sub").

Subject to satisfaction of the Merger Agreement's terms and conditions, upon consummation of the merger, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of Parent (the "Merger").

Pursuant to the Merger Agreement, upon completion of the Merger, each of the Company's shares of common stock issued and outstanding immediately prior to the effective time of the Merger (the "Shares") will be converted into the right to receive US$6.69 in cash without interest, except for (i) Shares owned by Holdco, Parent and Merger Sub, including shares to be contributed to Parent by Holdco, Mr. Zishen Wu, Prosper Sino Development Limited and MSPEA Agriculture Holding Limited, immediately prior to the effective time of the Merger pursuant to a contribution agreement, dated as of September 23, 2013, among Parent, Holdco, Mr. Zishen Wu, Prosper Sino Development Limited and MSPEA Agriculture Holding Limited, and (ii) Shares held by the Company or any subsidiary of the Company ((i) and (ii) collectively, the "Excluded Shares"), which will be cancelled and cease to exist as of the effective time of the Merger.

The offer represents a premium of 39.7% over the closing price of the Company's common stock of US$4.79 per share on October 12, 2012, the last trading day prior to the Company's announcement of its receipt of a "going-private" proposal.

Mr. Zishen Wu and Lead Rich International Limited will provide cash equity financing of US$12 million and US$15 million, respectively, for the Merger on the terms and subject to the conditions in the equity commitment letters provided by them in connection with the Merger.

Parent has secured (i) senior debt financing for the Merger of up to US$214 million from China Development Bank Corporation, Inner Mongolia branch and (ii) mezzanine debt financing for the Merger of US$35 million from Lead Rich International Limited.

Abax Global Capital (Hong Kong) Limited and its affiliates are not participating in the transactions contemplated by the Merger Agreement and have terminated the consortium agreement previously entered into with Mr. Zishen Wu, Holdco and MSPEA Agriculture Holding Limited.

The Company's Board of Directors, acting upon the unanimous recommendation of a special committee of the Board of Directors comprised solely of independent and disinterested directors (the "Special Committee"), approved and adopted the Merger Agreement and has recommended that the Company's stockholders vote to approve the Merger Agreement. The Special Committee negotiated the terms of the Merger Agreement with the assistance of its financial and legal advisors.

The transaction, which is currently expected to close before the end of the first fiscal quarter of 2014, is subject to the approval of the Merger Agreement by the (i) affirmative vote of the holders of at least a majority of the issued and outstanding Shares and preferred shares, voting together as a single class, with the number of votes the holders of preferred shares shall be entitled to vote equal to the number of Common Shares into which such preferred shares are convertible, as determined in accordance with the articles of incorporation of the Company, (ii) affirmative vote or consent of the holders of at least a majority of the issued and outstanding preferred shares and (iii) affirmative vote of the holders of at least a majority of the issued and outstanding Shares (other than the Excluded Shares).

The Company will schedule a special meeting of its stockholders (the "Special Meeting") for the purpose of voting on the approval of the Merger Agreement. If completed, the Merger will result in the Company becoming a privately held company and its shares will no longer be listed on The NASDAQ Global Market.

Houlihan Lokey Capital, Inc. is serving as financial advisor to the Special Committee. Cleary Gottlieb Steen & Hamilton LLP is serving as U.S. legal advisor to the Special Committee.

Loeb & Loeb LLP is serving as U.S. legal advisor to the Company. Skadden, Arps, Slate, Meagher & Flom LLP is serving as U.S. legal advisor to Mr. Zishen Wu and Full Alliance International Limited. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as U.S. legal advisor to MSPEA Agriculture Holding Limited.

Weil, Gotshal & Manges LLP is serving as U.S. legal advisor to Lead Rich International Limited. Akin Gump Strauss Hauer & Feld LLP is serving as U.S. legal advisor to Houlihan Lokey Capital, Inc.


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