TORONTO, ONTARIO -- (Marketwire) -- 02/11/13 -- Hanfeng Evergreen Inc. (TSX: HF) ("Hanfeng" or the "Corporation") announced today that Hanfeng, Mr. Xinduo Yu ("Mr. Yu") and 8310831 Canada Inc. (the "Purchaser"), a corporation wholly-owned by Mr. Yu, have entered into an arrangement agreement under which the Purchaser will acquire all of the outstanding common shares of the Corporation not already owned by Mr. Yu for cash consideration of CDN$2.25 per share (the "Consideration"). The transaction is proposed to be effected by way of a court-approved statutory plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement"). Mr. Yu is the Corporation's Chief Executive Officer and beneficially owns, or has control or direction over, approximately 20.4% of Hanfeng's outstanding common shares. This proposal by Mr. Yu to acquire Hanfeng (the "Privatization Proposal") was previously announced on January 8, 2013.
The Consideration offered under the Arrangement represents a premium of approximately 47% over the volume-weighted average price of the shares based on the Corporation's trading volume on the TSX over the 30 trading days prior to the initial announcement of the Privatization Proposal on January 8, 2013.
The Corporation has been advised that Agrium Inc., the beneficial owner of approximately 20% of Hanfeng's outstanding common shares and a significant company in the agricultural sector, has entered into a support agreement with the Purchaser pursuant to which it has agreed to vote its shares in favour of the Arrangement.
In order to consider the Arrangement, Hanfeng's annual and special meeting (the "Meeting") has been rescheduled to Friday, March 15, 2013, at 8:30 a.m. (Toronto time). In addition to the usual annual business, shareholders of the Corporation (the "Shareholders") will be asked to consider and if thought fit approve a special resolution in respect of the Corporation's proposed going-private transaction pursuant to the Arrangement.
Shareholders of record as of 5:00 p.m. (Toronto time) on January 15, 2013, the record date for the Meeting, are entitled to receive notice of and to attend, and to vote at, the Meeting or any adjournment or postponement of the Meeting.
As previously announced, the board of directors formed a special committee of independent directors (the "Special Committee"), comprised of Loudon Owen, David Thomson and Edwin Nordholm, to review and consider and make recommendations regarding the Privatization Proposal. The Special Committee engaged Deloitte LLP ("Deloitte") as its independent valuator and financial advisor, to prepare a valuation and fairness opinion with respect to the Transaction (the "Valuation and Fairness Opinion"). Subject to the qualifications, restrictions and assumptions set forth in the Valuation and Fairness Opinion, in the opinion of Deloitte, as of February 9, 2013, the consideration payable under the Arrangement is fair, from a financial point of view, to Shareholders other than Mr. Yu.
Having undertaken a thorough review of, and carefully considered, the Arrangement, including consulting with its independent legal and financial advisors, the Special Committee has unanimously determined that the Arrangement is in the best interests of the Corporation. Accordingly, the Special Committee unanimously recommended that the board of directors approve the Arrangement Agreement and recommend that Shareholders vote for the Arrangement Resolution.
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