Sky-mobi Limited (MOBI) Enters 'Going Private' Deal at $2.20/ADS

August 22, 2016 9:25 AM EDT

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Sky-mobi Limited (Nasdaq: MOBI) announced that it has entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Amber Shining Investment Limited (“Parent”), an exempted company with limited liability incorporated under the laws of the Cayman Islands and Power Rich Limited (“Merger Sub”), an exempted company with limited liability incorporated under the laws of the Cayman Islands and 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 common shares (including the Company’s common shares in the form of American depositary shares, or “ADSs”, each representing eight common shares) issued and outstanding immediately prior to the effective time of the Merger (the “Shares”) will be cancelled and cease to exist in exchange for the right to receive US$0.275 per Share or US$2.2 per ADS, in each case, in cash and without interest, except for (a) Shares, including such Shares represented by the ADSs, held by Mr. Michael Tao Song, chairman and chief executive officer of Sky-mobi, Xplane Limited and Mobi Joy Limited (collectively, the “Rollover Holders”), Parent (together with the Rollover Holders and the Merger Sub, the “Buyer Group”), the Company or any of their subsidiaries, which will be cancelled and cease to exist and no payment or distribution will be made with respect thereto and (b) Shares held by shareholders who have validly exercised and not effectively withdrawn or lost their rights to dissent from the Merger pursuant to Section 238 of the Companies Law of the Cayman Islands, which will be cancelled and cease to exist in exchange for the right to receive the payment resulting from the procedure set forth in Section 238 of the Companies Law of the Cayman Islands. The consideration of the Merger represents a premium of 25% over the Company’s closing price of US$1.76 per ADS on June 22, 2016, the last trading day prior to the Company’s announcement of its receipt of a “going-private” proposal.

The Buyer Group intends to fund the Merger with the proceeds from a committed loan facility in the amount of US$40 million arranged by China Merchants Bank Co., Ltd., New York Branch, pursuant to a debt commitment letter dated as of today.

The Company’s board of directors (the “Board”), acting upon the unanimous recommendation of a special committee of disinterested directors that are unaffiliated with Parent or Merger Sub (and that are not members of the Company’s management) (the “Special Committee”), authorized and 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 consummation of the Merger is subject to customary closing conditions, including the approval of the Merger Agreement by an affirmative vote of holders of at least two-thirds of the Shares present and voting in person or by proxy at a meeting of the Company’s shareholders which will be convened to consider the approval of the Merger Agreement and the Merger. The Rollover Holders have entered into a support agreement pursuant to which each has agreed, among other things, to vote all of his or its Shares 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-held company and its ADSs will no longer be listed on the NASDAQ Global Market.

In connection with the Merger, Roth Capital Partners, LLC is serving as a financial advisor to the Special Committee; Orrick, Herrington & Sutcliffe LLP is serving as U.S. legal advisor to the Special Committee; Conyers Dill & Pearman is serving as Cayman Islands legal advisor to the Special Committee; and Cleary Gottlieb Steen & Hamilton LLP is serving as U.S. legal advisor to the Company.

Gibson, Dunn & Crutcher LLP is serving as U.S. legal advisor to the Buyer Group; and Walkers is serving as Cayman Islands legal advisor to the Buyer Group.



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