SHENZHEN, China, July 6, 2015 /PRNewswire/ -- China Nepstar
Chain Drugstore Ltd. (NYSE: NPD) ("Nepstar" or the "Company"), a
leading retail drugstore chain in China based on the number of directly operated
stores, today announced that its board of directors has received a
preliminary non-binding proposal letter, dated July 6, 2015, from Simin
Zhang, chairman of the board of directors of the Company,
and China Neptunus Drugstore Holding Ltd., an investment vehicle
wholly owned by Mr. Zhang("Neptunus
Holding", and collectively with Mr. Zhang, the "Buyer
Parties"), pursuant to which the Buyer Parties propose to acquire
all of the outstanding ordinary shares (the "Shares") and the
American Depositary Shares ("ADSs", each representing two Shares)
of the Company, in both cases, that are not already beneficially
owned by the Buyer Parties and their affiliates at a price of
US$1.30 per Share or US$2.60 per ADS, as the case may be, in cash, in
a going private transaction(the "Acquisition"), subject to certain
conditions.
According to the proposal letter, the Acquisition is intended to
be financed with debt or equity capital or a combination thereof.
Also according to the proposal letter, on July 3, 2015, New Wave Developments Limited, a
wholly owned subsidiary of Neptunus
Holding, completed an acquisition of fifty million
(50,000,000) Shares from Capital Eagle Global Limited. Furthermore,
the proposal letter specifies that the Buyer Parties' proposal
constitutes only a preliminary indication of interest, and is
subject to negotiation and execution of definitive agreements
relating to the proposed transaction. A copy of the proposal
letter is attached hereto as Exhibit A.
The Company expects that its board of directors will form a
special committee consisting of independent directors (the "Special
Committee") to consider this proposal. The Company also expects
that the Special Committee will retain financial, legal and other
advisors to assist it in its review of the Acquisition.The Company
cautions its shareholders and others considering trading its
ordinary shares that no decisions have been made with respect to
the Company's response to the proposed transaction. There can be no
assurance that any definitive offer will be made, that any
agreement will be executed or that this or any other transaction
will be approved or consummated.
About China Nepstar Chain Drugstore Ltd.
China Nepstar Chain Drugstore Ltd. (NYSE: NPD) is a leading
retail drugstore chain in China.
As of March 31, 2015, the Company had
1,969 directly operated stores across 74 cities, one headquarter
distribution center and 15 regional distribution centers in
China. Nepstar uses directly
operated stores, centralized procurement and a network of
distribution centers to provide its customers with high-quality,
professional and convenient pharmaceutical products and services
and a wide variety of other merchandise, including OTC drugs,
nutritional supplements, herbal products, personal care products,
family care products, and convenience products. Nepstar's strategy
of centralized procurement, competitive pricing, customer loyalty
programs and private label offerings has enabled it to capitalize
on the continuing economic growth in China and take advantage of the demographic
trend in China to achieve a strong
brand and leading market position. For further information, please
go to http://www.nepstar.cn.
Safe Harbor Statement
This press release contains forward-looking statements. These
statements constitute "forward-looking" statements within the
meaning of 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. These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar
statements. Among other things, the quotations from management in
this press release and the Company's strategic operational plans
and business outlook, contain forward-looking statements. Such
statements involve certain risks and uncertainties that could cause
actual results to differ materially from those in the
forward-looking statements. Further information regarding these and
other risks is included in the Company's filings with the U.S.
Securities and Exchange Commission, including its annual report on
Form 20-F. The Company does not undertake any obligation to update
any forward-looking statement as a result of new information,
future events or otherwise, except as required under applicable
law.
Contacts
Zixin Shao
China Nepstar Chain Drugstore Ltd.
Chief Financial Officer
+86-755-2641-4065
ir@nepstar.cn
Exhibit A
The Board of Directors
China Nepstar Chain Drugstore Ltd.
25F, NeptunusYinheKeji Building
No.1, Kejizhong 3rd Road
Nanshan District, Shenzhen
Guangdong Province 518057
People's Republic of China
July 6, 2015
Dear Sirs:
Mr. Simin Zhang ("Mr. Zhang"),
chairman of the board of directors of China Nepstar Chain Drugstore
Ltd. (the "Company"), and China Neptunus Drugstore Holding Ltd., an
investment vehicle wholly owned by Mr. Zhang ("Neptunus Holding", and collectively with Mr.
Zhang, the "Buyer Parties"), are pleased to submit this preliminary
non-binding proposal to acquire all outstanding ordinary shares
(the "Shares") and the American Depositary Shares ("ADSs", each
representing two Shares) of the Company, in both cases, that are
not already beneficially owned by the Buyer Parties and their
affiliates in a going private transaction (the "Acquisition").
We believe that our proposal of US$1.30 in cash per Share, or US$2.60 in cash per ADS, will provide an
attractive opportunity to the Company's shareholders. This price
represents a premium of approximately 18.18% to the Company's
closing price on July 2, 2015.
The terms and conditions upon which we are prepared to pursue
the Acquisition are set forth below. We are confident in our
ability to consummate an Acquisition as outlined in this
letter.
1. Purchase
Price. The Buyer Parties are prepared to pay for the Shares and
ADSs acquired in the Acquisition at a price of US$1.30 per Share and US$2.60 per ADS, as the case may be, in cash.
2. Acquisition of
Additional Shares. On July 3,
2015, New Wave Developments Limited, a wholly owned
subsidiary of Neptunus Holding,
completed an acquisition of fifty million (50,000,000) Shares from
Capital Eagle Global Limited.
3. Financing. We
intend to finance the Acquisition with debt or equity capital or a
combination thereof. We are confident that we will secure adequate
financing to consummate the Acquisition.
4. Due Diligence. We
will be in a position to commence our due diligence for the
Acquisition immediately upon receiving access to the relevant
materials. Parties providing financing will require a timely
opportunity to conduct customary due diligence on the Company.
5. Definitive
Agreements. We are prepared to negotiate and finalize definitive
agreements (the "Definitive Agreements") providing for the
Acquisition and related transactions promptly. This proposal is
subject to execution of the Definitive Agreements. These documents
will include provisions typical for transactions of this
type. We anticipate the Definitive Agreements will be
completed in parallel with due diligence.
6. Confidentiality.
We are sure you will agree with us that it is in all of our
interests to ensure that we proceed in a confidential manner,
unless otherwise required by law, until we have executed the
Definitive Agreements or terminated our discussions.
7. Process. We
believe that the Acquisition will provide superior value to the
Company's shareholders. We recognize of course that the Company's
Board of Directors will, through a committee of independent
directors, evaluate the proposed Acquisition before it can make its
determination whether to endorse it. In considering the proposed
Acquisition, you should be aware that we are interested only in
acquiring the outstanding shares that the Buyer Parties and their
affiliates do not already own, and that the Buyer Parties and their
affiliates do not intend to sell their stake in the Company to a
third party.
8. Advisors. We have
retained Cleary Gottlieb Steen &
Hamilton LLP as U.S. legal counsel in connection with the
Acquisition.
9. No Binding
Commitment. This letter constitutes only a preliminary indication
of our interest, and does not constitute any binding commitment
with respect to an Acquisition. Such a commitment will result only
from the execution of Definitive Agreements, and then will be on
the terms provided in such documentation.
In closing, we would like to personally express our commitment
to working together to bring this Acquisition to a successful and
timely conclusion. Should you have any questions regarding this
proposal, please do not hesitate to contact us. We look
forward to speaking with you.
Sincerely,
Simin Zhang
By: _/s/ Simin
Zhang___________
China Neptunus Drugstore Holding Ltd.
By:_/s/ Simin
Zhang____________
Name: Simin Zhang
Title: Director
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SOURCE China Nepstar Chain Drugstore Ltd.