BEIJING, Dec. 1, 2016 /PRNewswire/ -- KongZhong
Corporation (NASDAQ: KZ) ("KongZhong" or the "Company"), a leading
online game developer and operator in the
People's Republic of China ("PRC"), today announced that it
has entered into a definitive agreement and plan of merger (the
"Merger Agreement") with Linkedsee Limited ("Parent") and Wiseman
International Limited ("Merger Sub"), a wholly owned subsidiary of
Parent, pursuant to which the Company will be acquired by an
investor consortium in an all-cash transaction with a transaction
value of approximately $299
million.
Pursuant to the terms of the Merger Agreement, at the effective
time of the merger, each ordinary share of the Company issued and
outstanding immediately prior to the effective time of the merger
(each a "Share") will be cancelled in exchange for the right to
receive $0.18875 in cash, and each
American depositary share (each an "ADS") of the Company,
representing 40 Shares, will be cancelled in exchange for the right
to receive $7.55 in cash, except for
(a) (i) Shares (including Shares represented by ADSs) owned by Mr.
Leilei Wang, Chairman and Chief
Executive Officer of the Company ("Mr. Wang") and certain of his
affiliates, who will be rolled over in the transaction, (ii) Shares
(including Shares represented by ADSs) owned by Parent, Merger Sub,
the Company or any of their respective wholly-owned subsidiaries,
and (iii) Shares (including Shares represented by ADSs) reserved
but not yet allocated by the Company for settlement upon the
exercise or vesting of any Company share awards, each of which will
be cancelled without any conversion thereof or consideration paid
therefor, and (b) Shares held by shareholders 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exercised and not effectively withdrawn or lost their rights to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 (the
"Dissenting Shares"), which will be cancelled in exchange for the
right to receive the payment of fair value of the Dissenting Shares
in accordance with Section 238 of the Companies Law of the
Cayman Islands.
The merger consideration represents a premium of 17.8% to the
closing price of the Company's ADSs on August 24, 2016, the last trading day prior to
the Company's announcement of its receipt of a revised
"going-private" proposal, a premium of 29.0% to the average closing
price of the Company's ADSs during the 90 trading days prior to its
receipt of the revised "going-private" proposal, and a premium of
13.4% to the closing price of the Company's ADSs on November 30, 2016, the last trading day prior to
the this announcement.
The investor consortium comprises, among others, Mr. Wang,
Gongqingcheng Wujiang Xingyao Investment Management Partnership
(Limited Partnership), Hexie Chengzhang Phase II (Yiwu) Investment
Center (Limited Partnership) and/or their respective
affiliates.
The Company's board of directors (the "Board"), acting upon the
unanimous recommendation of a committee of independent and
disinterested directors established by the Board (the "Special
Committee"), 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 negotiated the terms of the Merger Agreement with
the assistance of its independent financial and legal advisors.
The merger is subject to customary closing conditions including
the approval of the Merger Agreement 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 at a
meeting of the Company's shareholders convened to consider the
approval of the Merger Agreement and the merger. Mr. Wang, his
affiliates, IDG-Accel China Growth Fund II L.P., and IDG-Accel
China Investors II L.P. have agreed to vote all of the Shares and
ADSs they beneficially own, which represent approximately 24.7% of
the voting rights attached to the outstanding Shares as of the date
of the Merger Agreement, in favor of the authorization and approval
of the Merger Agreement and the merger. If completed, the
merger will result in the Company becoming a privately-owned
company and its ADSs will no longer be listed on the NASDAQ Stock
Market.
Duff & Phelps, LLC is serving as independent financial
advisor to the Special Committee, Skadden, Arps, Slate, Meagher
& Flom LLP is serving as independent U.S. legal counsel to the
Special Committee and Maples and Calder LLP is serving as
independent Cayman Islands legal
counsel to the Special Committee.
Davis Polk & Wardwell LLP is
serving as U.S. legal counsel to the investor consortium and
Walkers is serving as Cayman
Islands legal counsel to the investor consortium.
Sullivan & Cromwell LLP is serving as U.S. legal counsel to
the Company.
Additional Information about the Transaction
The Company will furnish to the U.S. Securities and Exchange
Commission (the "SEC") a report on Form 6-K regarding the merger,
which will include as an exhibit thereto 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 that will
include the proxy 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.
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 the
Company's shareholders with respect to the merger. Information
regarding the persons 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. 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 or furnished to the SEC when
they become available.
This announcement is neither a solicitation of a 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 in connection with the merger.
About KongZhong
KongZhong Corporation (NASDAQ: KZ), listed on Nasdaq since 2004,
is a leading online game developer and operator in China. KongZhong operates three main business
units, namely Internet Games, Mobile Games and WVAS. Under Internet
Games, KongZhong operates the largest Chinese military gaming
platform under the "WAR SAGA" brand, which includes games such as
World of Tanks, World of Warplanes and World of Warships. KongZhong
has the exclusive publishing rights for World of Tanks, World of
Warplanes and World of Warships, Guild Wars 2, Auto Club
Revolution, Blitzkrieg 3 and other titles in Mainland China.
Safe Harbor Statement
This announcement contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements other than statements
of historical fact in this announcement are forward-looking
statements, which may include but are not limited to, the Company's
ability to raise additional capital to finance its activities; the
effectiveness, profitability and marketability of its products; the
future trading of the securities of the Company; the Company's
ability to operate as a public company; the period of time for
which the Company's current liquidity will enable the Company to
fund its operations; general economic and business conditions;
demand in various markets for solar products; the volatility of the
Company's operating results and financial condition; the Company's
ability to attract or retain qualified senior management personnel
and research and development staff; and other risks detailed in the
Company's filings with the SEC. Forward-looking statements can be
identified by terminology such as "if," "will," "expected" and
similar statements. These forward-looking statements involve known
and unknown risks and uncertainties and are based on current
expectations, assumptions, estimates and projections about the
Company and the industry in which the Company operates. Risks,
uncertainties and assumptions include: uncertainties as to how the
Company's shareholders will vote at the meeting of shareholders;
the possibility that competing offers will be made; the possibility
that financing may not be available; the possibility that various
closing conditions for the transaction may not be satisfied or
waived; and other risks and uncertainties discussed in documents
filed with the SEC by the Company, as well as the Schedule 13E-3
transaction statement and the proxy statement to be filed by the
Company. You should not rely upon these forward-looking statements
as predictions of future events. The Company undertakes no
obligation to update forward-looking statements to reflect
subsequent occurring events or circumstances, or changes in its
expectations, except as may be required by law. Although the
Company believes that the expectations expressed in these forward
looking statements are reasonable, it cannot assure you that such
expectations will turn out to be correct, and the Company cautions
investors that actual results may differ materially from the
anticipated results.
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SOURCE KongZhong Corporation