Perfect World Agrees To Go Private

(RTTNews) - Chinese online game developer Perfect World Co Ltd (PWRD) on Sunday said it has entered into an agreement and plan of merger with Perfect Peony Holding Co Ltd ("Parent"), an exempted company with limited liability incorporated under the laws of the Cayman Islands and beneficially owned by Michael Yufeng Chi, the company's founder and chairman of the boar, and Perfect World Merger Co Ltd ("Merger Sub"), a wholly owned subsidiary of Parent.

Subject to satisfaction of the merger agreement's terms and conditions, 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, at the effective time of the merger, each of the company's ordinary shares issued and outstanding immediately prior to the effective time of the merger will be cancelled and cease to exist in exchange for the right to receive US$4.04 in cash without interest, and each American Depositary Share of the company (the "ADS"), which represents five class B ordinary shares, will be cancelled in exchange for the right to receive US$20.20 in cash without interest, subject to certain exceptions.

The merger consideration represents a premium of 28.2% over the company's closing price of US$15.76 per ADS on December 31, 2014, the last trading day prior to the company's announcement of its receipt of a "going-private" proposal.

Michael Yufeng Chi intends to fund the merger with the proceeds from a committed loan facility in the amount of US$900 million arranged by China Merchants Bank Co Ltd, New York Branch, China Merchants Bank Co Ltd, Offshore Banking Center and Wing Lung Bank, pursuant to a debt commitment letter.

The company's board approved the merger and resolved to recommend that the company's shareholders vote to authorize and approve it.

The merger, expected to close during the second half of 2015, is subject to customary closing conditions including the approval 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.

Michael Yufeng Chi has agreed to vote all of shares he beneficially owns in favor of 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 NASDAQ Global Selected Market.