SYSWIN (SYSW) Announces 'Going Private' Transaction

December 26, 2012 7:56 AM EST
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SYSWIN Inc. (NYSE: SYSW), a leading primary real estate service provider in China, today announced that it has entered into an agreement and plan of merger, dated December 24, 2012, with Brilliant Strategy Limited, a business company with limited liability incorporated under the laws of the British Virgin Islands, and Brilliant Acquisition Limited ("Merger Sub"), an exempted company with limited liability incorporated under the laws of the Cayman Islands and a wholly-owned subsidiary of Parent.

Parent is wholly owned by Mr. Liangsheng Chen, Chief Executive Officer, President and a director of the Company. Parent beneficially owns approximately 59.89% of the Company's issued and outstanding ordinary shares and intends to finance the merger and the other transactions contemplated by the Merger Agreement through a combination of cash contribution by Mr. Liangsheng Chen and cash in the Company and its subsidiaries.

Pursuant to the Merger Agreement, (i) upon the terms and subject to the conditions set forth therein, at the effective time of the merger, Merger Sub will be merged with and into the Company and the Company will survive the merger and become a wholly-owned subsidiary of Parent, and (ii) each ordinary share of the Company (including ordinary shares represented by American Depositary Shares ("ADSs"), each of which represents 4 ordinary shares) issued and outstanding immediately prior to the effective time of the merger will be cancelled in exchange for the right to receive US$0.5125 (or US$2.05 per ADS) in cash without interest, except for the ordinary shares (including ordinary shares represented by ADSs) (x) beneficially owned by Parent and its direct and indirect shareholders, including Mr. Liangsheng Chen, which will be cancelled without any consideration, and (y) owned by holders of such ordinary shares who have validly exercised and not effectively withdrawn or lost their appraisal rights pursuant to Section 238 of the Cayman Islands Companies Law, as amended. This represents a 28.1% premium over the closing price on September 6, 2012 and a 42.7% premium over the 60-trading day average closing price on September 6, 2012, the last trading day prior to the Company's announcement on September 7, 2012 that it had received a "going private" proposal.

Concurrently with the execution of the Merger Agreement, Mr. Liangsheng Chen delivered a limited guaranty in favor of the Company (the "Limited Guaranty") to guarantee, subject to the terms and conditions therein, the payment of the $2,000,000 termination fee and reimbursement of expenses that may become payable to the Company by Parent pursuant to the Merger Agreement, and an equity commitment letter (the "Commitment Letter") committing to invest in Parent an amount equal to $15,500,000 to fund the merger, subject to the terms and conditions set forth in the Commitment Letter.

The Company's Board of Directors, acting upon the unanimous recommendation of the special committee formed by the Board of Directors (the "Special Committee"), approved the Merger Agreement and the merger contemplated in the Merger Agreement and resolved to recommend that the Company's shareholders vote to approve and adopt the Merger Agreement and the merger. The Special Committee, which is composed solely of independent directors unrelated to Parent, Merger Sub or any of the management members of the Company, negotiated the terms of the Merger Agreement with the assistance of its financial and legal advisors.

The merger contemplated in the Merger Agreement, which is currently expected to close around the end of the first quarter of 2013, is subject to the approval by an affirmative vote of shareholders representing two-thirds or more of the Company's ordinary shares present and voting in person or by proxy as a single class at an extraordinary general meeting of the Company's shareholders which will be convened to consider the approval and adoption of the Merger Agreement and the merger, as well as certain other customary closing conditions. Parent has agreed to vote to approve the Merger Agreement and the merger. If completed, the merger will result in the Company becoming a privately-held company and its ADSs would no longer be listed on the New York Stock Exchange.

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