Global-Tech Advanced Innovations Inc. (NASDAQ: GAI) today announced that
its Board of Directors (the “Board”) has received an unsolicited
preliminary non-binding proposal letter, dated August 1, 2015, from Mr.
John C.K. Sham, President and Chief Executive Officer of the Company,
and certain of his controlled or affiliated entities (collectively, the
“Acquirer”), proposing a potential offer to acquire all of the
outstanding common shares of the Company (the “Offer”) not already
beneficially owned or controlled by the Acquirer for $8.75 in cash per
share (“Shares”).
According to the proposal letter, the Acquirer plans to form an
acquisition company for the purpose of implementing the Offer, and the
Offer is intended to be financed with a combination of cash and debt.
The proposal letter states that the Acquirer is confident of its ability
to timely secure adequate financing to consummate the Offer subject to
the terms and conditions set out therein. A copy of the proposal letter
is attached hereto as Exhibit A.
The Company’s Board of Directors intends to form a special committee
comprised of and selected by independent directors (the “Special
Committee”) to consider the proposal and any resulting Offer. The
Special Committee is authorized to retain advisors, including an
independent financial advisor and legal counsel, to assist it in
evaluating any such proposal or Offer.
The Board cautions the Company’s shareholders and others considering
trading in its securities since the Board has just received the
unsolicited preliminary non-binding proposal letter from the Acquirer
and no decisions have been made with respect to the Company’s response
to the proposal. There can be no assurance that any definitive offer
will be made, or that if an offer is received, that such an offer or any
other transaction will be approved or consummated. The Company does not
undertake any obligation to provide any updates with respect to this or
any other transaction, except as required under applicable law.
Global-Tech Advanced Innovations Inc. is a holding company, owning
subsidiaries that manufacture and market electronic components and other
related products, such as complementary metal oxide semiconductor (CMOS)
camera modules (CCMs). The primary focus of its subsidiaries is to
develop and market high-quality products for the communications industry
in China and export such products to markets in other countries
throughout the world.
Except for historical information, certain statements contained
herein are forward-looking statements that are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of
1995. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," “should,” "estimates," or variations of such words
and similar expressions are intended to identify such forward-looking
statements. These forward-looking statements are subject to risks and
uncertainties, including but not limited to, the impact of competitive
products and pricing, demand for new and existing products in our core
business, the financial condition of the Company’s customers, product
demand and market acceptance especially of our new products, the success
of new product development especially in the area of cellular phone
components and solutions, compact camera modules and other pending
projects, reliance on material customers, suppliers and key strategic
alliances, the terms and conditions of customer contracts and purchase
orders, availability and cost of raw materials, the timely and proper
execution of certain business plans, including the plan to diversify and
transform a portion of manufacturing capacity to higher-value,
technology-oriented products, currency fluctuations, including the
revaluation of the Chinese Renminbi, the imposition by China’s trading
partners of economic sanctions and/or protective tariffs on Chinese
manufactured goods, uncertainties associated with investments, the
regulatory environment, fluctuations in operating results, the impact of
changing global, political and economic conditions and other risks
detailed from time to time in the Company's filings with the U.S.
Securities and Exchange Commission including its most recent Report on
Form 20-F. The Company does not undertake to update its
forward-looking information, or any other information contained or
referenced in this press release to reflect future events or
circumstances.
Exhibit A
August 1, 2015
The Board of Directors
Global-Tech Advanced Innovations Inc.
12/F.,
Kin Teck Industrial Building
26 Wong Chuk Hang Road
Aberdeen,
Hong Kong
Dear Directors:
John C.K. Sham, President and Chief Executive Officer of Global-Tech
Advanced Innovations Inc. (the “Company”), and certain of his controlled
or affiliated entities (collectively, the "Acquirer") are pleased
to submit this preliminary non-binding proposal to acquire all
outstanding common shares (the “Shares”) of the Company not beneficially
owned or controlled by the Acquirer in a going-private transaction (the
“Acquisition”). Our proposed purchase price for each Share of the
Company is $8.75 in cash.
We believe that our proposal provides an attractive opportunity for the
Company's shareholders. Our proposed purchase price represents a premium
of approximately 192% to the closing trading price of the Company’s
Shares on July 31, 2015 and a premium of approximately 169% and 153% to
the average closing trading price during the last 30 and 60 trading
days, respectively.
1. Acquirer. The Acquirer, for the purpose
of the Acquisition, plans to form an acquisition company for the purpose
of implementing the Acquisition.
2. Purchase Price. The consideration
payable for each Share of the Company will be $8.75 in cash per Share
(other than those Shares held or controlled by the Acquirer that may be
rolled over in connection with the Acquisition).
3. Funding. Acquirer intends to finance the
Acquisition with a combination of cash and debt and is confident of its
ability to timely secure adequate financing to consummate the
Acquisition subject to the terms and conditions set out therein.
4. Due Diligence. We believe that we will
be in a position to complete customary due diligence for the Acquisition
in a timely manner and in parallel with discussions on the definitive
agreements. We respectfully ask the board of directors of the Company
(the “Board”) to accommodate such due diligence request and approve the
provision of confidential information relating to the Company and its
business to potential sources of debt financing subject to a customary
form of confidentiality agreement.
5. Definitive Agreements. We are prepared
to promptly negotiate and finalize definitive agreements (the
"Definitive Agreements") providing for the Acquisition and related
transactions. This proposal is subject to execution of the Definitive
Agreements. These documents will provide for representations,
warranties, covenants and conditions, which are typical, customary and
appropriate for transactions of this type.
6. Process. We believe that the Acquisition
will provide superior value to the Company's shareholders. We recognize
that the Board will evaluate the Acquisition independently before it can
make its determination to endorse it. Given the involvement of Mr. Sham
in the Acquisition, we expect that the independent, disinterested
members of the Board will proceed to consider the proposed Acquisition.
In considering our offer, the Board should be aware that the Acquirer is
interested only in acquiring the outstanding Shares that it does not
already beneficially own or control, and that the Acquirer does not
intend to sell any of its stake (owned or controlled) in the Company to
any third party.
7. Confidentiality. The Acquirer will, as
required by law, promptly file any document required with the U.S.
Securities and Exchange Commission to disclose this proposal. However,
we are sure you will agree that it is in all of our interests to ensure
that we proceed in a strictly confidential manner, unless otherwise
required by law, until we have executed Definitive Agreements or
terminated our discussions.
8. No Binding Commitment. This letter
constitutes only a preliminary indication of our interest, and does not
constitute any binding commitment with respect to the Acquisition. A
binding commitment will result only from the execution of Definitive
Agreements, and then will be on terms and conditions as provided in such
documentation.
In closing, we would like to express our commitment to working together
to bring this Acquisition to a successful and timely conclusion. Should
you have any questions regarding this proposal, please do not hesitate
to contact us. We look forward to hearing from you.
Sincerely yours,
/s/ John C.K. Sham
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