GUANGZHOU, China, Feb. 28, 2013 /PRNewswire-FirstCall/ -- 7 Days
Group Holdings Limited (NYSE: SVN) ("7 Days Group" or the
"Company"), a leading economy hotel chain based in China, today announced that it has entered
into a definitive Agreement and Plan of Merger (the "Merger
Agreement") with Keystone Lodging Holdings Limited ("Holdco")
(which is the party to the Merger Agreement solely for the limited
purposes of Sections 2.02(c) and 2.02(e) thereof), Keystone Lodging
Company Limited ("Parent"), a wholly owned subsidiary of Holdco,
and Keystone Lodging Acquisition Limited ("Merger Sub"), a wholly
owned subsidiary of Parent, pursuant to which Parent will acquire
the Company for US$4.60 per ordinary share or US$13.80 per American
Depositary Share, each representing three ordinary shares ("ADS").
This represents a 30.6% premium over the closing price of US$10.57
per ADS as quoted by the New York Stock Exchange (the "NYSE") on
September 25, 2012, the last trading day prior to the Company's
announcement on September 26, 2012 that it had received a "going
private" proposal, and a 43.2% premium over the volume-weighted
average closing price of the Company's ADSs during the 30 trading
days prior to September 26, 2012. The consideration to be paid to
holders of ordinary shares and ADSs implies an equity value for the
Company of approximately US$688 million, on a fully diluted
basis.
Immediately following the consummation of the transactions
contemplated under the Merger Agreement, Parent will be
beneficially owned by a consortium (the "Consortium") comprised of
new investors including certain affiliates of Carlyle Asia Partners
III, L.P. ("Carlyle") Sequoia Capital China Growth 2010 Fund, L.P.
("Sequoia") and an existing shareholder, an affiliate of Actis LLP
("Actis"), along with the following other existing shareholders of
the Company (and/or entities affiliated with or related to them)
who have elected to roll-over their interest in the Company in
connection with the Merger (collectively and together with "Actis",
the "Rollover Shareholders"): Mr. Boquan He and Mr. Nanyan Zheng,
the co-chairmen of the Company's board of directors, Mr.
Chien Lee, Ms. Qiong Zhang and Mr. Minjian Shi.
Subject to the terms and conditions of the Merger Agreement,
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"). At the effective time of the
Merger, each of the Company's ordinary shares issued and
outstanding immediately prior to the effective time of the Merger
(including ordinary shares represented by ADSs) will be cancelled
in consideration for the right to receive US$4.60 per ordinary share or US$13.80 per ADS, in each case, in cash and
without interest, except for (i) the ordinary shares and ADSs
beneficially owned by the Rollover Shareholders, Parent, the
Company or any of their respective subsidiaries, and ordinary
shares (including ADSs corresponding to such ordinary shares) held
by the depositary of the Company's ADS program and reserved for
issuance and allocation pursuant to the Company's share incentive
plan, all of which will be cancelled at the effective time of the
Merger for no consideration, and (ii) ordinary shares owned by
holders 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 ordinary shares will be cancelled at the
effective time of the Merger for the right to receive the value of
such shares in accordance with the provisions of Section 238 of the
Companies Law of the Cayman
Islands.
The Consortium intends to fund the Merger consideration through
a combination of cash contributions from Carlyle, Sequoia, Actis
and Mr. Boquan He (and/or their respective affiliates) pursuant to
equity commitment letters, and the proceeds from a committed loan
facility in the amount of US$120,000,000 arranged by Cathay United Bank,
Chinatrust Commercial Bank Co., Ltd, Nomura International
(Hong Kong) Limited, Ta Chong Bank, Ltd. and Taipei Fubon Commercial
Bank Co., Ltd. (collectively, the "Financing Banks") pursuant to a
mandate letter.
The Company's board of directors, acting upon the unanimous
recommendation of the special committee (the "Special Committee")
formed by the board of directors, 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, which is comprised solely of
directors of the Company who are unaffiliated with any of Holdco,
Parent, Merger Sub, the Consortium or any of the management members
of the Company, exclusively negotiated the terms of the Merger
Agreement with the assistance of its financial and legal
advisors.
The Merger, which is currently expected to close during the
second half of 2013, is subject to customary closing conditions as
well as the approval by an affirmative vote of holders of the
Company's ordinary shares representing at least two-thirds of the
ordinary shares present and voting in person or by proxy as a
single class at a meeting of the Company's shareholders which will
be convened to consider the approval of the Merger Agreement and
the Merger. As of the date of the Merger Agreement, the Rollover
Shareholders collectively beneficially own approximately 50.16% of
the Company's outstanding shares (excluding outstanding options of
the Company) and each of them has entered into a support agreement
with Parent pursuant to which each has agreed, among other things,
to vote all of his, her or its ordinary shares of the Company in
favor of the authorization and approval of the Merger Agreement and
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 NYSE.
J.P. Morgan Securities (Asia
Pacific) Limited is serving as financial advisor to the
Special Committee. Baker & McKenzie is serving as U.S. legal
advisor to the Special Committee and Maples and Calder is serving
as Cayman Islands legal advisor to
the Special Committee. O'Melveny and Myers LLP is serving as U.S.
legal advisor to the Company. Shearman & Sterling is serving as
U.S. legal advisor to J.P. Morgan Securities (Asia Pacific) Limited.
Skadden, Arps, Slate, Meagher & Flom LLP and Kirkland &
Ellis are serving as co-U.S. legal advisors to the Consortium.
Latham & Watkins LLP is serving as U.S. legal advisor to Mr.
Boquan He and Mr. Nanyan Zheng. Conyers
Dill & Pearman and Han Yi Law Offices are serving as
Cayman Islands and PRC legal
advisors to the Consortium, respectively. Nomura is serving as
financial advisor to the Consortium. CITIC Securities Corporate
Finance (HK) Limited is serving as financial advisor to Mr. Nanyan
Zheng. Linklaters is serving as legal advisor to the Financing
Banks.
Additional Information about the Transaction
The Company will furnish to the Securities and Exchange
Commission (the "SEC") a report on Form 6-K regarding the proposed
transactions described in this announcement, which will include the
Merger Agreement. All parties desiring details regarding the Merger
are urged to review these documents, which will be available at the
SEC's website (http://www.sec.gov).
In connection with the Merger, the Company will prepare and mail
a proxy statement to its shareholders. In addition, certain
participants in the Merger 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 READ CAREFULLY AND 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 MERGER 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 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. In
addition, these documents can be obtained, without charge, by
contacting the Company at the following address and/or phone
number:
7 Days Group Holdings Limited
5C-11 Creative Industry Zone, 397 XinGangZhong Road
Guangzhou, PRC 510310
Phone: (8620) 8922 5858
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 ordinary shares as of March 31,
2012 is also set forth in the Company's Form 20-F, which was
filed with the SEC on April 26, 2012.
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 7 Days Group Holdings Limited
7 Days Group is a leading and fast growing national economy
hotel chain based in China. It converts and operates limited
service economy hotels across major metropolitan areas in
China under its award-winning "7
Days Inn" brand. The Company strives to offer consistent and
high-quality accommodations and services primarily to the
growing population of value-conscious business and leisure
travelers who demand affordable, clean, comfortable,
convenient and safe lodging, and to respond to its guests'
needs.
Cautionary Note About Forward-Looking Statements
This document may include certain statements that are not
descriptions of historical facts, but are forward-looking
statements. Such statements include, among others, those concerning
expected benefits and costs of the proposed Merger; management
plans relating to the Merger; the expected timing of the completion
of the Merger; the parties' ability to complete the Merger
considering the various closing conditions, including any
conditions related to regulatory approvals, as well as all
assumptions, expectations, predictions, intentions or beliefs about
future events. Forward-looking statements can generally be
identified by the use of forward-looking terminology such as
"will," "should," "may," "believes," "expects" or similar
expressions. Such information is based upon expectations of the
Company's management that were reasonable when made but may prove
to be incorrect. All of such assumptions are inherently subject to
uncertainties and contingencies beyond the Company's control and
based upon premises with respect to future business decisions,
which are subject to change. Risks and uncertainties that may cause
actual results to differ from the forward-looking statements
contained in this press release include, but are not limited to,
those discussed under the heading "Risk Factors" in the Company's
filings with the U.S. Securities and Exchange Commission, including
its registration statements on Form F-1, F-3 and annual reports on
Form 20-F, in each case as amended. The Company does not undertake
any obligation to update any forward-looking statement, except as
required under applicable law.
For further information, please contact:
Investor Contact:
Vivian Chen, Investor Relations
Director
7 Days Group Holdings Limited
+86-20-8922-5858
IR@7daysinn.cn
Investor Relations (US):
Mahmoud Siddig, Managing
Director
Taylor Rafferty
+1 (212) 889-4350
7DaysInn@taylor-rafferty.com
Investor Relations (HK):
Candy Cheung, Senior
Consultant
Taylor Rafferty
+852 3196 3712
7DaysInn@taylor-rafferty.com
SOURCE 7 Days Group Holdings Limited