Syswin Inc. (SYSW: Quote) announced Monday that it has entered into an agreement and plan of merger with Brilliant Strategy Limited or Parent and Brilliant Acquisition Limited or Merger Sub, a wholly-owned subsidiary of Parent. Parent is wholly owned by Liangsheng Chen, Chief Executive Officer, President and a director of Syswin.
Parent beneficially owns approximately 59.89% of Syswin’s issued and outstanding ordinary shares.
As per the Merger Agreement, (i) Merger Sub will be merged with and into Syswin and Syswin will survive the merger and become a wholly-owned subsidiary of Parent, and (ii) each ordinary share of the Company (including ordinary shares represented by American Depositary Shares, each of which represents 4 ordinary shares) issued and outstanding immediately prior to the effective time of the merger will be cancelled in exchange for the right to receive US$0.5125 or US$2.05 per ADS in cash without interest.
The offer price represents a 28.1% premium over the closing price on September 6, 2012 and a 42.7% premium over the 60-trading day average closing price on September 6, 2012, the last trading day prior to the Company’s announcement on September 7, 2012 that it had received a “going private” proposal.
Concurrently with the execution of the Merger Agreement, Liangsheng Chen delivered a limited guaranty in favor of Syswin to guarantee, subject to the terms and conditions therein, the payment of the $2.00 million termination fee and reimbursement of expenses that may become payable to Syswin by Parent pursuant to the Merger Agreement, and an equity commitment letter committing to invest in Parent an amount equal to $15.50 million to fund the merger.
Syswin said its Board approved the Merger Agreement and the merger contemplated in the Merger Agreement and resolved to recommend that the company’s shareholders vote to approve and adopt the Merger Agreement and the merger.
The Merger Agreement is currently expected to close around the end of the first quarter of 2013. Parent has agreed to vote to approve the Merger Agreement and the merger. If completed, the merger will result in the Company becoming a privately-held company and its ADSs would no longer be listed on the New York Stock Exchange.
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by RTT Staff Writer
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