BEIJING, Dec. 1, 2016 /PRNewswire/ -- KongZhong Corporation
(NASDAQ: KZ) ("KongZhong" or the "Company"), a leading online game developer and operator in the
People's Republic of China ("PRC"), today announced that it has entered into a definitive agreement and plan of merger
(the "Merger Agreement") with Linkedsee Limited ("Parent") and Wiseman International Limited ("Merger Sub"), a wholly owned
subsidiary of Parent, pursuant to which the Company will be acquired by an investor consortium in an all-cash transaction with a
transaction value of approximately $299 million.
Pursuant to the terms of the Merger Agreement, at the effective time of the merger, each ordinary share of the Company issued
and outstanding immediately prior to the effective time of the merger (each a "Share") will be cancelled in exchange for the
right to receive $0.18875 in cash, and each American depositary share (each an "ADS") of the
Company, representing 40 Shares, will be cancelled in exchange for the right to receive $7.55 in
cash, except for (a) (i) Shares (including Shares represented by ADSs) owned by Mr. Leilei Wang,
Chairman and Chief Executive Officer of the Company ("Mr. Wang") and certain of his affiliates, who will be rolled over in the
transaction, (ii) Shares (including Shares represented by ADSs) owned by Parent, Merger Sub, the Company or any of their
respective wholly-owned subsidiaries, and (iii) Shares (including Shares represented by ADSs) reserved but not yet allocated by
the Company for settlement upon the exercise or vesting of any Company share awards, each of which will be cancelled without any
conversion thereof or consideration paid therefor, and (b) Shares held by shareholders who have validly exercised and not
effectively withdrawn or lost their rights to dissent from the merger pursuant to Section 238 of the Companies Law of the
Cayman Islands (the "Dissenting Shares"), which will be cancelled in exchange for the right to
receive the payment of fair value of the Dissenting Shares in accordance with Section 238 of the Companies Law of the
Cayman Islands.
The merger consideration represents a premium of 17.8% to the closing price of the Company's ADSs on August 24, 2016, the last trading day prior to the Company's announcement of its receipt of a revised
"going-private" proposal, a premium of 29.0% to the average closing price of the Company's ADSs during the 90 trading days prior
to its receipt of the revised "going-private" proposal, and a premium of 13.4% to the closing price of the Company's ADSs on
November 30, 2016, the last trading day prior to the this announcement.
The investor consortium comprises, among others, Mr. Wang, Gongqingcheng Wujiang Xingyao Investment Management Partnership
(Limited Partnership), Hexie Chengzhang Phase II (Yiwu) Investment Center (Limited Partnership) and/or their respective
affiliates.
The Company's board of directors (the "Board"), acting upon the unanimous recommendation of a committee of independent and
disinterested directors established by the Board (the "Special Committee"), approved the Merger Agreement and the merger and
resolved to recommend that the Company's shareholders vote to authorize and approve the Merger Agreement and the merger. The
Special Committee negotiated the terms of the Merger Agreement with the assistance of its independent financial and legal
advisors.
The merger is subject to customary closing conditions including the approval of the Merger Agreement by the 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 convened to consider the approval of the Merger Agreement and the merger. Mr. Wang,
his affiliates, IDG-Accel China Growth Fund II L.P., and IDG-Accel China Investors II L.P. have agreed to vote all of the Shares
and ADSs they beneficially own, which represent approximately 24.7% of the voting rights attached to the outstanding Shares as of
the date of the Merger Agreement, in favor of the authorization and approval of the Merger Agreement and the merger. If
completed, the merger will result in the Company becoming a privately-owned company and its ADSs will no longer be listed on the
NASDAQ Stock Market.
Duff & Phelps, LLC is serving as independent financial advisor to the Special Committee, Skadden, Arps, Slate, Meagher
& Flom LLP is serving as independent U.S. legal counsel to the Special Committee and Maples and Calder LLP is serving as
independent Cayman Islands legal counsel to the Special Committee.
Davis Polk & Wardwell LLP is serving as U.S. legal counsel to the investor consortium and
Walkers is serving as Cayman Islands legal counsel to the investor consortium.
Sullivan & Cromwell LLP is serving as U.S. legal counsel to the Company.
Additional Information about the Transaction
The Company will furnish to the U.S. Securities and Exchange Commission (the "SEC") a report on Form 6-K regarding the merger,
which will include as an exhibit thereto the Merger Agreement. All parties desiring details regarding the merger are urged to
review these documents, which will be available at the SEC's website (http://www.sec.gov).
In connection with the merger, the Company will prepare and mail a proxy statement to its shareholders. In addition, certain
participants in the merger will prepare and mail to the Company's shareholders a Schedule 13E-3 transaction statement that will
include the proxy statement. These documents will be filed with or furnished to the SEC. INVESTORS AND SHAREHOLDERS ARE URGED TO
READ CAREFULLY AND IN THEIR ENTIRETY THESE MATERIALS AND OTHER MATERIALS FILED WITH OR FURNISHED TO THE SEC WHEN THEY BECOME
AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE MERGER AND RELATED MATTERS. In addition to receiving
the proxy statement and Schedule 13E-3 transaction statement by mail, shareholders also will be able to obtain these documents,
as well as other filings containing information about the Company, the merger and related matters, without charge, from the SEC's
website (http://www.sec.gov) or at the SEC's public reference
room at 100 F Street, NE, Room 1580, Washington, D.C. 20549.
The Company and certain of its directors, executive officers and other members of management and employees may, under SEC
rules, be deemed to be "participants" in the solicitation of proxies from the Company's shareholders with respect to the merger.
Information regarding the persons who may be considered "participants" in the solicitation of proxies will be set forth in the
proxy statement and Schedule 13E-3 transaction statement relating to the merger when it is filed with the SEC. Additional
information regarding the interests of such potential participants will be included in the proxy statement and Schedule 13E-3
transaction statement and the other relevant documents filed with or furnished to the SEC when they become available.
This announcement is neither a solicitation of a proxy, an offer to purchase nor a solicitation of an offer to sell any
securities and it is not a substitute for any proxy statement or other filings that may be made with the SEC in connection with
the merger.
About KongZhong
KongZhong Corporation (NASDAQ: KZ), listed on Nasdaq since 2004, is a leading online game developer and operator in
China. KongZhong operates three main business units, namely Internet Games, Mobile Games and
WVAS. Under Internet Games, KongZhong operates the largest Chinese military gaming platform under the "WAR SAGA" brand, which
includes games such as World of Tanks, World of Warplanes and World of Warships. KongZhong has the exclusive publishing rights
for World of Tanks, World of Warplanes and World of Warships, Guild Wars 2, Auto Club Revolution, Blitzkrieg 3 and other titles
in Mainland China.
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are
forward-looking statements, which may include but are not limited to, the Company's ability to raise additional capital to
finance its activities; the effectiveness, profitability and marketability of its products; the future trading of the securities
of the Company; the Company's ability to operate as a public company; the period of time for which the Company's current
liquidity will enable the Company to fund its operations; general economic and business conditions; demand in various markets for
solar products; the volatility of the Company's operating results and financial condition; the Company's ability to attract or
retain qualified senior management personnel and research and development staff; and other risks detailed in the Company's
filings with the SEC. Forward-looking statements can be identified by terminology such as "if," "will," "expected" and similar
statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current
expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates. Risks,
uncertainties and assumptions include: uncertainties as to how the Company's shareholders will vote at the meeting of
shareholders; the possibility that competing offers will be made; the possibility that financing may not be available; the
possibility that various closing conditions for the transaction may not be satisfied or waived; and other risks and uncertainties
discussed in documents filed with the SEC by the Company, as well as the Schedule 13E-3 transaction statement and the proxy
statement to be filed by the Company. You should not rely upon these forward-looking statements as predictions of future events.
The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or
circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the
expectations expressed in these forward looking statements are reasonable, it cannot assure you that such expectations will turn
out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results.
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SOURCE KongZhong Corporation