Charm Communications Forms Special Committee To Evaluate "going Private" Offer

(RTTNews) - China-based advertising agency Charm Communications Inc. (CHRM) said Friday that it has formed a special committee of its board of directors to evaluate a "going private" proposal that it received from a consortium led by the company's founder and chief executive officer He Dang.

Charm Communications said last Monday that it received a preliminary non-binding proposal from a consortium led by Dang to take the company private for $4.70 in cash per American Depositary Share or ADS of the company. The consortium comprises Dang, two companies in the British Virgin Islands that are controlled by Dang - Honour Idea Ltd and Merry Circle Trading Ltd - and China-focused private equity firm CMC Capital Partners HK Limited.

The consideration payable for each ADS, representing two Class A ordinary shares, will be $4.70 in cash, or $2.35 in cash per Class A ordinary share. The consideration payable for each Class B ordinary share of the company will also be $2.35 in cash. The offer price represents a 17.2 percent premium to Charm Communications' closing stock price of $4.01 per share on September 27, 2013.

The special committee is composed of three independent directors of Charm Communications - Zhan Wang, Andrew Rickards and Gang Chen, with Wang serving as chairperson of the special committee.

The special committee has been assigned with the responsibility to evaluate, negotiate and recommend to the board of directors any proposals involving a strategic transaction by the company with one or more third parties. The special committee plans to retain advisors, including an independent financial advisor, to assist in the evaluation of the buyout offer and any additional proposals that may be made by Dang and his affiliates.

Charm Communications noted that the special committee has not made any decisions with respect to the buyout offer from Dang.

CHRM closed Thursday's regular trading session at $4.32, up $0.06 on a volume of 14,700 shares.