HONG KONG, March 22, 2013 /PRNewswire/ -- LJ International
Inc. ("LJI" or the "Company"; NASDAQ: JADE), a
foreign private issuer incorporated in the British Virgin Islands and a leading colored
gemstone and diamond jeweler with retail and wholesale businesses,
today announced that it has entered into an agreement and plan of
merger (the "Merger Agreement") with Flora Bloom Holdings
("Parent"), a Cayman
Islands exempted company with limited liability, and Flora
Fragrance Holdings Limited ("Merger Sub"), a business
company with limited liability incorporated under the laws of the
British Virgin Islands and a
wholly-owned subsidiary of Parent, pursuant to which Parent will
acquire the Company for US$2.00 per
ordinary share of the Company (the "Transaction"). This
transaction price represents a 24.2% premium over the closing price
of the Company's ordinary shares on August
10, 2012, the last trading day prior to the Company's public
announcement that it had received a "going private" proposal, and a
29.0% premium over the volume weighted average price of the
Company's ordinary shares over the 60 trading days ended on
August 10, 2012.
Immediately following the Transaction, Parent will be owned by a
consortium of investors led by Mr. Yu Chuan
Yih, Chairman and Chief Executive Officer of the Company
("Mr. Yih") and including (i) Urban Prosperity Holding
Limited, an entity owned and controlled by FountainVest China
Growth Capital Fund, L.P. and its parallel funds and affiliates,
(ii) Mr. Peter Au, Ms. Ka Man Au, Mr. Hon Tak
Ringo Ng, Mr. Yuin Chiek Lye
and Ms. Vicky Chan, each a member of
the management of the Company (collectively, the "Rollover
Shareholders"), and (iii) Mr. Zhicheng
Shi and certain of his affiliated companies (collectively,
the "Mr. Shi
Shareholders").
Pursuant to the Merger Agreement, (i) upon the terms and subject
to the conditions set forth therein, at the effective time of the
Transaction, Merger Sub will be merged with and into the Company
with the Company surviving the merger as a wholly-owned subsidiary
of Parent, and (ii) each ordinary share of the Company issued and
outstanding immediately prior to the effective time of the
Transaction will be cancelled in exchange for the right to receive
US$2.00 in cash without interest,
except for the ordinary shares beneficially owned by (x) Mr. Yih,
the Rollover Shareholders and the Mr. Shi
Shareholders, each of whom has entered into a rollover
agreement with Parent under which such shareholder has agreed to
the cancellation of its shares in the Company, the rollover of its
options (if applicable) and the subscription for newly issued
shares of Parent, and (y) holders of such ordinary shares who have
validly exercised and not effectively withdrawn or lost their
appraisal rights pursuant to Section 179 of the British Virgin
Islands Business Companies Act, 2004, as amended. Currently, Mr.
Yih, the Rollover Shareholders and the Mr. Shi Shareholders collectively own approximately
18.2% of the Company's outstanding shares.
If the merger is completed, each stock option awarded under the
Company's share incentive plans (other than those held by the
Rollover Shareholders) shall, subject to consent from the owner of
the option, be cancelled and converted into the right to receive
cash in an amount equal to the excess of US$2.00 over the exercise price of such
option.
The Company's Board of Directors, acting upon the unanimous
recommendation of the Special Committee formed by the Board of
Directors, approved the Merger Agreement and the Transaction and
resolved to recommend that the Company's shareholders vote to
approve the Merger Agreement and the Transaction. The Special
Committee, which is composed solely of 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 Transaction is subject to the approval at a meeting of the
Company's shareholders duly convened to vote upon the Merger
Agreement and the Transaction (the "Shareholders' Meeting")
by an affirmative vote of holders of shares representing at least a
majority of the shares present and voting in person or by proxy as
a single class at the Shareholders' Meeting, as well as certain
other closing conditions. Mr. Yih, the Rollover Shareholders and
the Mr. Shi Shareholders have agreed
to vote all of their shares to approve the Merger Agreement and the
Transaction. If completed, the Transaction will result in the
Company becoming a privately-held company and its shares would no
longer be listed on the NASDAQ Global Market.
Houlihan Lokey (China) Limited is serving as financial advisor
to the Special Committee. Akin Gump Strauss Hauer & Feld LLP is
serving as United States legal
advisor to the Special Committee and Maples and Calder is serving
as British Virgin Islands legal
advisor to the Special Committee. Andrew N.
Bernstein, P.C. and Han Kun Law Offices are serving as
United States and PRC legal
advisors to the Company, respectively.
Fried, Frank, Harris, Shriver & Jacobson LLP is serving as
United States legal advisor to the
buyer group. Conyers Dill & Pearman and King & Wood
Mallesons are serving as British Virgin
Islands and PRC legal advisors to the buyer group,
respectively. Sidley Austin LLP is serving as United States legal advisor to Mr. Yih.
Additional Information about the Transaction
The Company will file with the Securities and Exchange
Commission (the "SEC") a report on Form 6-K regarding the
Transaction, which will include the Merger Agreement. All parties
desiring details regarding the Transaction are urged to review
these documents, which will be available at the SEC's website
(http://www.sec.gov).
In connection with the Transaction, the Company will prepare and
mail a proxy statement to its shareholders. In addition, certain
participants in the Transaction will prepare and mail to the
Company's shareholders a Schedule 13E-3 transaction statement.
These documents will be filed with or furnished to the SEC.
INVESTORS AND SHAREHOLDERS ARE URGED TO CAREFULLY READ 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 TRANSACTION
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 Transaction and
related matters, without charge, from the SEC's website or at the
SEC's public reference room at 100 F Street, NE, Room 1580,
Washington, D.C. 20549. In
addition, these documents can be obtained, without charge, by
contacting the Company at the following address and/or phone
number:
LJ International Inc.
Unit #12, 12/F, Block A
Focal Industrial Centre
21 Man Lok Street, Hung Hom
Kowloon, Hong Kong
T: 852-2764-3622
About LJ International Inc.
LJ International Inc. (LJI) (NASDAQ:JADE) is engaged in the
designing, branding, marketing and distribution of its full range
of jewelry. It has built its global business on a vertical
integration strategy, and an unwavering commitment to quality and
service. Through its China-based
ENZO retail chain stores, LJI is now a major presence in
China's fast-growing retail
jewelry market. As a wholesaler, it distributes to fine jewelers,
department stores, national jewelry chains and electronic and
specialty retailers throughout North
America and Western Europe.
Its product lines incorporate all major categories, including
earrings, necklaces, pendants, rings and bracelets. For more
information about the Company, visit the Company's website at
www.ljintl.com.
Cautionary Note Regarding Forward-Looking
Statements: This press release may contain
"forward-looking statements" within the meaning of the Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and as defined in the
U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by words such as
"anticipates," "intends," "plans," "seeks," "believes,"
"estimates," "expects" and similar references to future periods.
Forward-looking statements are based on our current expectations
and assumptions regarding our business, the economy and other
future conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict. Potential
risks and uncertainties include, but are not limited to, those
relating to whether this or any other transaction will be approved
or consummated. Our actual results may differ materially from those
contemplated by the forward-looking statements. They are neither
statements of historical fact nor guarantees or assurances of
future performance. We caution you therefore against relying on any
of these forward-looking statements. Factors that could cause
actual results to differ materially from such statements, as well
as additional risk factors, are detailed in the Company's most
recent filings with the SEC. Any forward-looking statement made by
us in this press release speaks only as of the date on which it is
made. We undertake no obligation to publicly update any
forward-looking information contained in this press release or with
respect to the announcements described herein, except as may be
required by law.
Investor Relations contact:
LJ International Inc.
Ringo Ng
Chief Financial
Officer
E: ir@ljintl.com
Fleishman-Hillard Inc.
E: ir@ljintl.com
T: 852-2530-0228
SOURCE LJ International Inc.
