China's Simcere Agrees To Be Taken Private By Chairman For $9.66/ADS - Update

(RTTNews) - China-based Simcere Pharmaceutical Group (SCR) Wednesday said that it has agreed to go private in a deal, under which a consortium led by its founder Chairman Jinsheng Ren will acquire the firm for $4.83 per ordinary share or $9.66 per American depositary share, each representing two shares.

In March, Jinsheng Ren and his affiliate, New Good Management Limited, and Assure Ahead Investments Limited, an affiliate of Hony Capital II, L.P., proposed to acquire all the remaining shares of Simcere Pharma not beneficially owned by them for $4.78 per share or $9.56 per ADS.

Simcere Pharma, which specializes in the development, manufacturing, and marketing of branded generic and proprietary pharmaceuticals, now said that it has entered into a definitive agreement and plan of merger with Simcere Holding and Simcere Acquisition Limited.

The company noted that the per share price represents a premium of 21.4 percent over its closing price on March 8, the last trading day prior to the company's announcement that it had received a "going-private" proposal. The price also represents a premium of 23.1 percent to the volume-weighted average closing price of 30 trading days prior to that day.

Simcere Pharma noted that the companies, which collectively own about 77.57 percent stake, will roll over their shares in the deal.

Subject to the terms and conditions of the deal, at the effective time of the merger, Simcere Acquisition will merge with and into Simcere Pharma, with Simcere Pharma continuing as the surviving company and a wholly-owned subsidiary of Simcere Holding.

The company said its board of directors approved the merger agreement, and recommends that its shareholders vote to approve the deal. The merger is currently expected to close around the end of 2013, subject to various closing conditions, including shareholder approval.

Once completed, the deal will result in Simcere Pharma becoming a privately-held company and its ADSs will no longer be listed on the New York Stock Exchange.

The company added that Simcere Holding has entered into a debt commitment letter pursuant to which China Merchants Bank, New York branch has committed to provide debt financing in the amount of $85 million for the deal, subject to certain conditions.

In the transaction, UBS AG is serving as financial advisor to the Special Committee, while Shearman & Sterling LLP is serving as U.S. legal advisor.

Cleary Gottlieb Steen & Hamilton LLP is serving as U.S. legal advisor to the buyer group.

On the NYSE, Simcere Pharma shares closed Tuesday's trading at $9.36, down $0.02 or 0.21 percent.