BEIJING, Oct. 3, 2017 /PRNewswire/ -- SINA Corporation ("SINA"
or the "Company") (NASDAQ: SINA), a leading online media company serving China and the global
Chinese communities, today announced that the SINA Board of Directors has sent a letter to shareholders in connection with the
Company's upcoming 2017 Annual General Meeting of Shareholders (the "Annual General Meeting") to be held on November 3, 2017. SINA shareholders of record at the close of business on September 20,
2017 are entitled to attend and vote at the Annual General Meeting. The proxy statement and other important information
related to the Annual General Meeting can be found on the Company's website at http://corp.sina.com.cn/eng/AGM/.
The SINA Board of Directors unanimously recommends that shareholders vote "FOR" Yichen
Zhang and vote "AGAINST" each of Aristeia's nominees by signing, dating and returning the WHITE proxy card
TODAY.
The full text of the letter follows:
SINA URGES SHAREHOLDERS TO VOTE THE WHITE PROXY CARD "FOR" YICHEN ZHANG
THE CURRENT SINA BOARD BRINGS A PROVEN RECORD OF VALUE CREATION DRIVEN BY WORLD-CLASS EXPERIENCE AND
FINANCIAL ACUMEN
ARISTEIA HAS FAILED TO PRESENT CANDIDATES WITH ADDITIVE SKILLS OR EXPERIENCE
SINA URGES SHAREHOLDERS TO VOTE "AGAINST" EACH OF ARISTEIA'S NOMINEES, BRETT KRAUSE AND THOMAS MANNING, ON
THE WHITE PROXY CARD
October 3, 2017
Dear Fellow Shareholders,
At the SINA 2017 Annual General Meeting to be held on November 3, 2017, you will be asked to
make an important decision regarding the composition of the Company's Board of Directors that could impact the future of the
Company and the value of your investment in SINA. Your Board of Directors unanimously recommends that you vote
"FOR" the re-election of Yichen Zhang on the WHITE proxy card TODAY.
Under the current leadership and direction of the Board, SINA continues to successfully execute its strategic plan, deliver
strong financial results, drive growth and create substantial value for all shareholders. Despite this successful track record,
Aristeia has publicly stated that it will solicit proxies in order to elect two of its own nominees to your Board.
Currently, you are represented by a Board of Directors that is highly qualified, is committed to acting in your best interests
and has been carefully selected to ensure the right mix of skills and expertise that is critical to overseeing a leading online
media company in China. Additionally, 80% of SINA's Board comprises independent directors. As
you may know, a New York City hedge fund, Aristeia Capital, L.L.C., which owns approximately
3.5% of SINA's shares, has launched a costly and disruptive proxy contest to elect two of its hand-picked nominees to your Board.
We urge our shareholders to discard any blue proxy card or other proxy materials sent to you by Aristeia and to vote "AGAINST"
the Aristeia nominees, Brett Krause and Thomas Manning, on SINA's
WHITE proxy card. We believe that Aristeia's proposals will not create sustainable shareholder value, but will instead
consist of financial engineering maneuvers that will introduce substantial risk to your Company, including certain proposals that
are simply not feasible. We believe that now is not the right time to risk derailing the Board's strategic
plan.
In contrast, our collective Board, including our director nominee, Yichen Zhang , has
the right mix of industry expertise and company knowledge to deliver value to all shareholders, and it is important that you vote
"FOR" Mr. Yichen Zhang on the WHITE proxy card TODAY.
YOUR CURRENT SINA BOARD HAS THE RIGHT MIX OF LEADERSHIP EXPERIENCE COVERING ALL CRITICAL
AREAS
How has the Board used its collective executive leadership experience and institutional knowledge of investments
to drive success for SINA?
We, Charles Chao, Ter Fung Taso, Yan
Wang, Song-Yi Zhang and Yichen Zhang, collectively bring
relevant expertise in China's internet industry, professional online media and social media
businesses and finance and asset management at publicly-traded companies. Our respective financial and operational leadership as
well as our governance experience provide us with a deep understanding of how best to manage the financial and investment
functions of publicly traded companies operating in China. A number of us have drawn heavily
from our backgrounds to provide counsel to the financial analysis involved in strategic decisions made by the SINA Board and to
serve as fiduciaries to SINA and its shareholders in our oversight and accountability of management's execution of SINA's
strategy.
The current Board is directly responsible for many of SINA's greatest successes, including the launch and enormous success of
Weibo. We developed and executed a long-term vision to fully incubate Weibo within SINA, identifying key investments that have
supported Weibo's infrastructure and further contributed to its tremendous growth and outperformance. The Board's strategy,
management and oversight of Weibo up to Weibo's initial public offering have also created an opportunity for SINA shareholders to
benefit greatly from Weibo's growth through SINA's nearly 120% share price appreciation achieved since Weibo's IPO in
April 2014 and our distribution of Weibo shares. 1 Since October 2016, we have distributed approximately 14.2 million Weibo shares to SINA shareholders, representing
more than 12% of SINA's total holdings in Weibo valued at approximately US$1.4 billion.
2
In short, your Board comprises world-class individuals with the talent and commitment to oversee the implementation of SINA's
investment and operating strategy while leveraging their unique experience to effectively and efficiently adapt to the volatile
and rapidly changing internet business market. Further, we reiterate our commitment to continue holding management accountable
for both the Company's successes and failures and to ensure that when there is need for change, it is swiftly addressed.
The Board has a proven track record of prudent capital allocation execution. How does the Board think about
capital allocation priorities at SINA and how it has executed the capital allocation plan ?
Like many public companies, we are focused on a balanced capital allocation strategy that responsibly incorporates investment
in organic and acquisitive growth while delivering returns to shareholders.
As a result of our strong balance sheet, SINA has available capital to opportunistically repurchase shares under our current
US$500 million share repurchase authorization. We periodically pull this lever as a means of both
returning capital and assisting in managing any trading discount to the Company's Net Asset Value ("NAV"). According to
third-party financial analysts, a discount to NAV is a common occurrence for companies such as SINA that have a holding company
structure, and we are able to repurchase shares in the open market to help bring spikes in the discount back in line with the
standard holding company range. Since March 2016, SINA has repurchased US$311 million of its shares under the share repurchase authorization.
Combined with the Weibo distributions, SINA has returned approximately US$1.7 billion of capital
to security holders since 2014, which is the highest amount for China-based internet and
technology companies listed in the U.S.
Our strategy at any given time also reflects the operating and regulatory environment within the
People's Republic of China ("PRC"), which has a direct influence on the way SINA conducts business and manages our balance
sheet – beyond the control of our Board and management team. S&P Global recently issued a report discussing this issue and
"[t]he recent intensification of government efforts to rein in corporate leverage…" 3 The Board and
management team are very familiar with these factors and their influence on our business in China, and it is vitally important that our investors around the world understand the significance of the
PRC's governance within our Board deliberations and our process for setting our long-term strategy with the management team.
The Board clearly has extensive experience within the Chinese market and its regulatory environment. How has
this shaped SINA's M&A strategy?
Among our Board members, we have several directors with extensive experience managing and advising Chinese companies on
financings for M&A transactions. Just as the PRC provides guidance on corporate leverage, like all countries, there are also
laws, regulations and tax implications that govern M&A activities.
In China, the laws governing the value-added telecommunication industry and the media
industry – and especially those related to M&A – are highly complex. The PRC requires acquisitions by foreign investors of
Chinese companies engaged in industries that are crucial to national security, such as online media, to be subject to security
review. We can think of this process as one similar to the Committee on Foreign Investment in the U.S. (CFIUS), which has caused
many companies to withdraw proposed transactions after significant time and resources have been invested and shareholder value
lost.
Through the collective insight of our Board members, this presents very difficult hurdles for change of control transactions
for SINA. As far as partial distributions of assets, such as Weibo, a basic analysis shows there would be significant tax
disadvantages to shareholders, as well as substantial costs incurred to both SINA and Weibo due to dis-synergies resulting from a
separation.
In its most recent communication, Aristeia seems to acknowledge what third parties and SINA already understand – that its
proposals are impractical and unrealistic. Instead, Aristeia has chosen a new tactic that resorts to personal attacks and
half-truths and intentionally ignores the fact that SINA shareholders have made significant gains on their shares, including
Aristeia, who has sold in and out of SINA's stock throughout the share price appreciation achieved since Weibo's IPO.
What inspires the Board most about the future of SINA, and how do you all believe these components will create
shareholder value?
Our transition within SINA's core business to enhance our mobile advertising platform is exciting, and we are confident that
we will successfully evolve SINA's approach in the current market environment that is trending away from PC advertising and
toward mobile. SINA is already a leader in China and the global Chinese communities that we
serve, and there is so much potential value that we believe can be created from this evolution to mobile ads. The entire Board is
focused on harnessing our collective experience to continue driving innovation and value for SINA.
We are also inspired by the opportunities ahead for the continued growth of Weibo as part of SINA and the benefits this
relationship brings to SINA shareholders. SINA and Weibo have successfully shared services across data, management and IP that
each company can leverage to create value and advance its respective strategy. This is a critical component of SINA's shift to
mobile ads and is accelerating the growth of SINA's Fintech businesses by driving significant user traffic. Together, we expect
SINA will strengthen its core platform and improve performance, while simultaneously continuing to advance Weibo's strategy and
deliver strong results. This is a win for all shareholders as they continue to gain significant value for their investment and
build on the significant growth of SINA's share price since Weibo's IPO.
Our commitment to driving value and alignment with shareholders' interests is reflected in our collective Board ownership of
12.8% of SINA's outstanding ordinary shares. Charles Chao, the Chairman of the Board and CEO, has
fervently demonstrated his personal commitment to the long-term strategy and success of SINA as the Company's largest
shareholder, owning approximately 12% of SINA's outstanding ordinary shares. In fact, Mr. Chao purchased these shares in
June 2015 at an above-market price when SINA's share price was under significant pressure for an
extended period of time in order to instill greater confidence in SINA's shareholder base.
The market clearly supported Mr. Chao's investment as SINA's share price grew by more than US$8.00 per share, or 23%, on June 1, 2015, the day of the transaction
announcement, and increased as much as US$17.00 per share, or nearly 50%, in the two weeks
following the announcement. 4 The recent solid operational and financial performance of SINA, two years
after Mr. Chao's decision, continues to benefit ALL shareholders with an approximately 225% increase in SINA's share price.
5
Today's SINA is well positioned with the right plan, the right structure and the right Board in place to deliver results and
shareholder value for the short-, mid- and long-term. We are successfully executing a winning strategy and have strong
momentum.
PROTECT YOUR INVESTMENT – VOTE "FOR" OUR SINA NOMINEE, YICHEN ZHANG
The Aristeia nominees, Mr. Krause, a tech-startup investor, and Mr. Manning, a law school professor, are eligible to receive
payments of up to US$160,000 from Aristeia for simply participating in Aristeia's costly and
wasteful proxy contest. Furthermore, if shareholders elect Messrs. Krause and Manning, nearly 30% of the SINA Board would have
been directly compensated by a hedge fund, which owns a mere 3.5% of our shares, seeking to implement a risky and
value-destructive agenda.
How can Messrs. Krause and Manning possibly function independently of Aristeia if they have been compensated by it? We believe it is clear that they cannot .
Notwithstanding these direct ties, the experience of the Aristeia nominees is not additive and may be detrimental to our
commitment to create value for ALL SINA shareholders. For example, Mr. Krause has no experience serving on the
Board of a large, well-established public company and may have a potential conflict of interest as a result of his personal
involvement as a managing partner of PurpleSky Capital, an angel investor in one of SINA's direct competitors, Inke (映客). In
addition, Mr. Manning already serves on three public company boards, has commitments to five other organizations and resides in
Illinois, USA – he is therefore unlikely to have the time necessary to devote to SINA.
Finally, and most importantly for SINA, both Mr. Krause and Mr. Manning lack understanding of the Chinese regulatory
market.
We urge you to vote "AGAINST" each of Aristeia's nominees on the enclosed WHITE proxy card and to discard any blue proxy
card or other proxy materials you may receive from Aristeia.
Instead, we trust that you want us to implement strategies and programs that are calculated to sustain our long-term
performance without undue risk. Now is the time for SINA to continue building momentum and prevent anything from derailing the
work that is delivering results for all SINA shareholders. If that is indeed what you desire, we encourage you to vote "FOR"
Yichen Zhang and "AGAINST" each of Aristeia's nominees TODAY by signing and dating the WHITE
proxy card and returning it in the postage-paid envelope provided.
We thank you for your continued support.
Sincerely,
Charles Chao
Chairman of the Board and CEO
|
Ter Fung Tsao
Independent Director
|
Yan Wang
Independent Director
|
|
|
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Song-Yi Zhang
Independent Director
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Yichen Zhang
Independent Director
|
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Your Vote Is Important, No Matter How Many or How Few Shares You Own!
If you have questions about how to vote your shares, please contact:
INNISFREE M&A INCORPORATED
Shareholders may call toll-free (from the U.S. and Canada): 877-750-5834
International shareholders may call: +1-412-232-3651
Banks and brokers (call collect): 212-750-5833
Please visit http://corp.sina.com.cn/eng/AGM/ for more information.
|
About SINA
We are an online media company serving China and the global Chinese communities. Our digital
media network of SINA.com (portal), SINA.cn (mobile portal), SINA Mobile Apps and Weibo.com (social media) enable Internet users
to access professional media and user generated content in multi-media formats from the web and mobile devices and share their
interests to friends and acquaintances.
SINA.com offers distinct and targeted professional content on each of its region-specific websites and a full range of
complementary offerings. SINA.cn and SINA Mobile Apps provide news information, professional and entertainment content from
SINA.com customized for mobile users in WAP (mobile browser) and mobile application format. Weibo is a leading social media
platform for people to create, distribute and discover Chinese-language content. Based on an open platform architecture, Weibo
allows users to create and post feeds and attach multi-media content, as well as access a wide range of organically and
third-party developed applications, such as online games.
Through these properties and other product lines, we offer an array of online media and social media services to our users to
create a rich canvas for businesses and advertisers to effectively connect and engage with their targeted audiences.
Safe Harbor Statement
This letter contains forward-looking statements that relate to, among other things, SINA's expected performance and SINA's
strategic and operational plans. SINA may also make forward-looking statements in the Company's periodic reports to the U.S.
Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not
historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. These
forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends,"
"plans," "believes," "confidence," "estimates" and similar statements. Forward-looking statements involve inherent risks and
uncertainties. A number of important factors could cause actual results to differ materially from those contained in any
forward-looking statement. Potential risks and uncertainties include, but are not limited to, failure to meet internal or
external expectations of future performance given the rapidly evolving markets; condition of the global financial and credit
market; the uncertain regulatory landscape in China; fluctuations in the Company's quarterly
operating results; the Company's reliance on online advertising sales and value-added services for a majority of its revenues;
failure to successfully develop, introduce, drive adoption of or monetize new features and products; failure to enter and develop
the small and medium enterprise market by the Company or through cooperation with other parties; failure to successfully
integrate acquired businesses; risks associated with the Company's investments, including equity pick-up and impairment; and
failure to compete successfully against new entrants and established industry competitors. Further information regarding these
and other risks is included in SINA's annual report on Form 20-F for the year ended December 31,
2016 and its other filings with the SEC. Past performance is not necessarily indicative of future results. Given these
uncertainties, you should not place undue reliance on these forward-looking statements. The information in this letter is
provided only as of the date hereof, and SINA assumes no obligation to update its forward-looking statements in this letter or
elsewhere, except as required by law.
Contacts
Investor Relations
SINA Corporation
Phone: 8610-5898 3336
Email: ir@staff.SINA.com.cn
Larry Miller / Scott Winter
Innisfree M&A Incorporated
Phone: 212-750-5833
Media
Ed Trissel / Nick Lamplough
Joele Frank, Wilkinson Brimmer Katcher
Phone: 212-355-4449
1 Based on SINA's closing share price on October 2, 2017. Source: Bloomberg.
2 Value based on Weibo closing share price as of October 2, 2017. Source:
Bloomberg.
3 Source: S&P Global Ratings. "Research Update: People's Republic of China Ratings Lowered to 'A+/A-1'; Outlook
Stable." September 21, 2017. Permission to use the quotation neither sought nor obtained.
4 Based on SINA's closing share price on May 29, 2015. Source: Bloomberg.
5 Based on SINA's closing share price on May 29, 2015 and October 2, 2017. Source: Bloomberg.
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SOURCE SINA Corporation