SHANGHAI, Feb. 19, 2019 /PRNewswire/ -- eHi Car Services
Limited ("eHi" or the "Company") (NYSE: EHIC), a leading car rental
and car services company in China,
today announced that it has entered into an Amended and Restated
Agreement and Plan of Merger (the "Amended Merger Agreement") with
Teamsport Parent Limited ("Parent") and Teamsport Bidco Limited
("Merger Sub"), a wholly owned subsidiary of Parent, on
February 18, 2019. The Amended Merger
Agreement amends and restates in its entirety the Agreement and
Plan of Merger, dated as of April 6,
2018, among Parent, Merger Sub and the Company (the
"Original Merger Agreement").
Under the Amended Merger Agreement, eHi shareholders will
receive cash consideration equal to US$6.125 per common share of the Company (each, a
"Share") or US$12.25 per American
depositary share of the Company (each, an "ADS"), each of which
represents two Class A common shares of the Company, other than
Rollover Shares (as defined below) and ADSs representing Rollover
Shares, as applicable. The cash consideration to be paid to
shareholders under the Amended Merger Agreement is approximately
9.25% less than the cash consideration payable under the Original
Merger Agreement, and represents a premium of 26.9% over the
closing price of US$9.65 per ADS as
quoted by the New York Stock Exchange on January 22, 2019, and a premium of 22.9% and
19.2%, respectively, over the 30- and 60- trading day
volume-weighted average price per ADS as quoted by the New York
Stock Exchange prior to January 22,
2019, the day before a proposal to revise the Original
Merger Agreement (the "Revised Proposal") was made to the special
committee (the "Special Committee") of eHi's Board of Directors
(the "Board") in a letter from Mr. Ray
Ruiping Zhang, eHi's Chairman and CEO, dated January 23, 2019.
The Revised Proposal indicated, among other things, that Mr.
Zhang, together with other members of the consortium under the
Original Merger Agreement, which included, among others, certain
affiliates of MBK Partners Fund IV, L.P., The Crawford Group, Inc.
and Dongfeng Asset Management Co. Ltd. (collectively, the "Original
Buyer Group"), concluded that the transactions provided for in the
Original Merger Agreement could not be completed on the
contemplated terms and that the Original Buyer Group was prepared
to terminate the Original Merger Agreement unless the Special
Committee agreed to amend the terms of the Original Merger
Agreement.
Under the terms of the Original Merger Agreement, either the
Company or Parent could terminate the Original Merger Agreement if
the merger contemplated by the Original Merger Agreement had not
been completed by October 6,
2018.
In the Revised Proposal, Mr. Zhang indicated to the Special
Committee that members of the Original Buyer Group were in
discussions with representatives of the competing buyer consortium
(the "Ocean Link Consortium") comprising Ocean Imagination L.P.
("Ocean Link"), Ctrip Investment Holdings Ltd. ("Ctrip") and
certain of their affiliates, regarding the terms on which the
members of the Ocean Link Consortium might agree to withdraw their
competing proposal to acquire all of the shares of eHi not owned by
them, and to join with certain members of the Original Buyer Group
to form an updated consortium. In addition, in the Revised
Proposal, Mr. Zhang indicated that, assuming an agreement could be
reached between certain members of the Original Buyer Group and the
Ocean Link Consortium:
- Mr. Zhang, certain affiliates of MBK Partners Fund IV, L.P.,
The Crawford Group, Inc., and Dongfeng Asset Management Co. Ltd.
would be prepared to join and form an updated consortium with
certain members of the Ocean Link Consortium (the "Updated Buyer
Group");
- members of the Ocean Link Consortium would contribute their
Shares and ADSs to an affiliate of Parent as rollover equity;
- certain affiliates of MBK Partners Fund IV, L.P. together
with The Crawford Group would significantly increase their existing
equity commitments, and Ocean Link would provide an additional
equity commitment, to fund the cash consideration to be paid in the
merger contemplated under the Revised Proposal, as a result of
which the transactions contemplated under the Revised Proposal
would be financed entirely through equity capital, in the form of
cash contributions and rollover equity, and therefore no debt
financing would be required; and
- the changes to the composition of the Original Buyer Group and
the terms of the Revised Proposal would provide increased closing
certainty to all parties and a substantial benefit to the
unaffiliated security holders of eHi.
The Special Committee evaluated the Revised Proposal with the
assistance of its financial and legal advisors, and negotiated the
Amended Merger Agreement. The Board of Directors of the Company
duly considered and determined that the entry into the Amended
Merger Agreement was in the best interests of the Company and its
shareholders. The determination of the Board was made after
receiving the unanimous recommendation of the Special Committee,
which is composed solely of independent and unaffiliated directors
and worked closely with its independent financial and legal
advisors to determine whether such transaction was in the best
interests of the Company and its unaffiliated shareholders. In
making these determinations, the Board and the Special Committee
also considered the alternative of remaining a standalone public
company.
Concurrently with the execution of the Amended Merger Agreement,
the members of the Updated Buyer Group, comprising certain
affiliates of MBK Partners Fund IV, L.P., Ctrip, Ocean Link, Mr.
Zhang, The Crawford Group, Inc. and Dongfeng Asset Management Co.
Ltd., entered into an Amended and Restated Interim Investors
Agreement, an Amended and Restated Contribution and Support
Agreement ("Amended Contribution and Support Agreement"), and
various other ancillary agreements, pursuant to which, among other
things:
- the members of the Updated Buyer Group agreed to work together
exclusively to implement and consummate the transactions
contemplated by the Amended Merger Agreement, including the Merger
(as defined below), and use their reasonable best efforts to cause
the transactions contemplated by the Amended Merger Agreement to be
consummated as promptly as practicable following the date of the
Amended Merger Agreement;
- members of the Ocean Link Consortium agreed to withdraw, and
cease all discussions, negotiations and agreements with respect to,
their competing offer; and
- certain existing shareholders of the Company, including L &
L Horizon, LLC, an affiliate of Mr. Zhang, The Crawford Group, ICG
Holdings 1, LLC, ICG Holdings 2, LLC, Dongfeng Asset Management Co.
Ltd., Ctrip and CDH Car Rental Service Limited (collectively, the
"Rollover Shareholders"), agreed (i) to vote all of their
respective Shares in favor of the authorization and approval of the
Amended Merger Agreement and the Merger (and against any competing
proposal) and (ii) to contribute their respective Shares in
exchange for newly issued shares of Holdco.
Upon the terms and subject to the conditions of the Amended
Merger Agreement, at the effective time of the merger (the
"Effective Time"), Merger Sub will merge with and into the Company,
with the Company surviving the merger as the surviving company (the
"Surviving Company") under Cayman
Islands law (the "Merger"), and each Share issued and
outstanding immediately prior to the Effective Time will be
cancelled and cease to exist in exchange for the right to receive
cash consideration equal to US$6.125
per Share, and each ADS issued and outstanding immediately prior to
the Effective Time will be cancelled and cease to exist in exchange
for the right to receive cash consideration of US$12.25 per ADS, in each case, without interest
and net of any applicable withholding taxes, except for (i) certain
Shares (the "Rollover Shares") held by the Rollover Shareholders,
(ii) Shares (including Shares represented by ADSs) held immediately
prior to the Effective Time by Parent, the Company or any of their
subsidiaries or by the Company's ADS depositary and reserved for
future issuance under the Company's share incentive plan, which
Shares will be cancelled without payment of any consideration, and
(iii) Shares held by holders who have validly exercised and not
effectively withdrawn or lost their rights to dissent from the
Merger in accordance with Section 238 of the Companies Law of the
Cayman Islands, which Shares will
be cancelled at the Effective Time of the Merger for the right to
receive the fair value of such Shares determined in accordance with
the provisions of Section 238 of the Companies Law of the
Cayman Islands. The Rollover
Shares will not be cancelled at the Effective Time and will
continue as ordinary shares of the Surviving Company.
If and when completed, the Merger will result in the Company
becoming a privately-held company that is 100% owned by Parent,
which will be beneficially owned by the Updated Buyer Group. In
addition, the Merger will result in the Company's ADSs no longer
being listed on the New York Stock Exchange and the ADSs and the
Company's Class A common shares represented by the ADSs no longer
being registered under Section 12 of the Securities Exchange Act of
1934.
The closing of the Merger is currently expected to occur during
the first or second quarter of 2019, and is subject to the
satisfaction or waiver of the closing conditions set forth in the
Amended Merger Agreement, including receipt of requisite approval
of the shareholders of the Company. The Amended Merger Agreement
and the Merger must be authorized and approved by (i) a
shareholders' special resolution approved 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 as a
single class at an extraordinary general meeting of the Company's
shareholders, (ii) a shareholders' resolution approved by the
affirmative vote of holders of Shares representing a majority of
the aggregate voting power of the Shares and (iii) a shareholders'
resolution approved by the affirmative vote of holders of a
majority of the total outstanding Class A common shares of the
Company.
Under the terms of the Amended Contribution and Support
Agreement, the Rollover Shareholders have agreed to vote all of
their respective Shares in favor of the authorization and approval
of the Amended Merger Agreement and the Merger. As of the date of
the Amended Merger Agreement, the Rollover Shareholders
beneficially own in the aggregate Shares and ADSs which represent
in aggregate approximately 47.70% of the issued and outstanding
common shares of the Company and 77.96% of the outstanding voting
power of the Company.
Concurrently with the execution of the Amended Merger Agreement,
the Company, certain members of the Original Buyer Group, and
members of the Ocean Link Consortium entered into a Global
Settlement Agreement pursuant to which each of the parties thereto
has agreed to withdraw and release its existing claims against each
other party thereto in connection with its existing disputes in the
courts of the Cayman Islands and
in arbitration in Hong Kong, other
than certain reserved costs claims, and subject to the consummation
of the Merger, to withdraw and release such reserved costs
claims.
Members of the Ocean Link Consortium issued a notice to the
Board dated February 19, 2019
withdrawing their proposal to acquire all outstanding Shares of the
Company not owned by them.
In light of the Amended Merger Agreement, the Company together
with various members of the Updated Buyer Group are required to
prepare updated filings with the United States Securities and
Exchange Commission ("SEC"), including an amended transaction
statement on Schedule 13E-3 (the "Transaction Statement") to be
filed with the SEC by the Company and certain filing persons in
connection with the Merger, and the exhibits to the Transaction
Statement, including the proxy statement (the "Proxy Statement")
relating to the Amended Merger Agreement and the transactions
contemplated thereunder. Further details relating to the Board and
the Special Committee's consideration of the Amended Merger
Agreement, the Merger, and related transactions will be set forth
in the Transaction Statement and the Proxy Statement. These
documents will be mailed to shareholders and filed with or
furnished to the SEC. SHAREHOLDERS, ADS HOLDERS AND OTHER INVESTORS
ARE URGED TO READ THESE MATERIALS AND OTHER MATERIALS FILED WITH OR
FURNISHED TO THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE, AS THEY
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER, THE
COMPANY, THE PARTIES TO THE AMENDED MERGER AGREEMENT, AND RELATED
MATTERS.
Additional Information about the Transactions
The Company will furnish to the SEC a report on Form 6-K
regarding the proposed transactions described in this announcement,
which will include as an exhibit thereto the Amended Merger
Agreement. All parties desiring details regarding the transactions
contemplated by the Amended Merger Agreement, including the Merger,
are urged to review these documents, which will be available at the
SEC's website (http://www.sec.gov).
In addition to receiving the Transaction Statement and Proxy
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
shareholders with respect to the Merger. Information regarding the
persons or entities 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. Information regarding certain of
these persons and their beneficial ownership of the Company's
shares as of March 31, 2017, is also
set forth in the Company's Form 20-F, which was filed with the SEC
on April 27, 2017. 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
the SEC when they become available.
This announcement is neither a solicitation of 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 should the Merger proceed.
About eHi Car Services Limited
eHi Car Services Limited (NYSE: EHIC) is a leading car rental
and car services provider in China. The Company's mission is
to provide comprehensive mobility solutions as an alternative to
car ownership by best utilizing existing resources and sharing
economy to create optimal value. eHi distinguishes itself
in China's fast-growing car rental and car services
market through its complementary business model, customer-centric
corporate culture, broad geographic coverage, efficient fleet
management, leading brand name, and commitment to technological
innovation. eHi is the exclusive strategic partner
in China to the brands Enterprise Rent-A-Car, National
Car Rental and Alamo Rent A Car owned by Enterprise Holdings, Inc.,
the largest car rental provider in the world. Enterprise Holdings,
Inc. is owned by the Crawford Group, Inc. For more information
regarding eHi, please visit http://en.1hai.cn.
Safe Harbor
This news release may include certain statements that are not
descriptions of historical facts, but are forward-looking
statements. These forward-looking statements can be identified by
terminology such as "if," "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar
statements. Forward-looking statements involve risks, uncertainties
and other factors that could cause actual results to differ
materially from those contained in any such statements. Potential
risks and uncertainties include, but are not limited to,
uncertainties as to the expected benefits and costs of the proposed
Merger; the expected timing of the completion of the Merger; the
parties' ability to complete the Merger considering the various
closing conditions; the possibility that various closing conditions
to the Merger may not be satisfied or waived; how the Company's
shareholders will vote at the meeting of shareholders; the
possibility that competing offers will be made and other risks and
uncertainties discussed in the Company's filings with the U.S.
Securities and Exchange Commission, including the Schedule 13E-3
transaction statement and the proxy statement filed by the Company
in connection with the Merger. The Company does not undertake any
obligation to update any forward-looking statement, except as
required under applicable law.
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