BEIJING, May 17, 2016 /PRNewswire/ -- E-Commerce China
Dangdang Inc. ("Dangdang" or the "Company") (NYSE: DANG), a
leading business-to-consumer e-commerce company in China, today announced that the board of
directors of the Company (the "Board") has received a non-binding
proposal, dated May 17, 2016, from
Ms. Peggy Yu Yu, Chairwoman of the
Board, and Mr. Guoqing Li, Chief
Executive Officer and director of the Company (together, the "Buyer
Group"), to acquire all of the outstanding shares of the Company
not already owned by the Buyer Group at US$6.50 per American depositary share ("ADS",
each ADS representing five Class A common share) or US$1.30 per common share in cash, subject to
certain conditions. A copy of the proposal letter is attached
hereto as Exhibit A.
The special committee of the Board (the "Special Committee"),
formed to consider the original proposal by the Buyer Group, dated
July 9, 2015, is evaluating this
revised proposal with the assistance of its financial and legal
advisors. The Special Committee cautions the Company's shareholders
and others considering trading in the Company's securities that no
decision has been made by the Special Committee or the Board with
respect to the revised proposal. There can be no assurance that any
definitive offer will be made, any agreement will be executed or
that this or any other transaction will be approved or
consummated.
About Dangdang
E-Commerce China Dangdang Inc. is a leading business-to-consumer
e-commerce company in China. On
its website dangdang.com and through mobile Dangdang, the Company
offers books and media products as well as selected general
merchandise products including fashion and apparel, baby, children
and maternity and home and lifestyle products, among others. It
also operates the dangdang.com marketplace program, which allows
third-party merchants to sell their products alongside products
sourced by the Company. Dangdang is transforming itself into an
integrated online shopping experience with prominent destination
categories. Dangdang's nationwide fulfilment and delivery
capabilities, high-quality customer service support and scalable
technology infrastructure enable it to provide a compelling online
shopping experience to customers. For more information, please
visit ir.dangdang.com.
Investor Contacts:
Ye Ji
Investor Relations
E-Commerce China Dangdang Inc.
Phone: +86-10-5799-2306
E-mail: ir@dangdang.com
Elaine Ketchmere, CFA
Compass Investor Relations
+1-310-528-3031
Email: eketchmere@compass-ir.com
Exhibit A
May 17, 2016
The Board of Directors
E-Commerce China Dangdang Inc.
21/F, Jing An Center
No. 8 North Third Ring Road East
Chaoyang District, Beijing
100028
People's Republic of China
Dear Directors:
Reference is made to the non-binding preliminary proposal, dated
July 9, 2015 (the "Original
Proposal"), made by Ms. Peggy Yu Yu,
Chairwoman of the Board of Directors of E-Commerce China Dangdang
Inc. (the "Company"), and her spouse, Mr. Guoqing Li, Chief Executive Officer and director
of the Company (together, the "Buyer Group") to acquire all
outstanding common shares (the "Shares"), including shares
represented by American depositary shares ("ADSs", each
representing five Class A Shares), of the Company not beneficially
owned by the Buyer Group in a going-private transaction (the
"Acquisition").
We very much appreciate the time spent and efforts made by the
special committee (the "Special Committee") of the Company's board
of directors and its advisors so far to facilitate our due
diligence and negotiate the definitive agreements providing for the
Acquisition. We are submitting this revised non-binding proposal to
reaffirm our interests in the Acquisition and to revise our offer
price (the "Offer Price") to US$6.50
in cash per ADS, or US$1.30 in cash
per Share.
Our decision to revise the Offer Price has been a difficult one
to make but is necessitated by the tougher than expected market
conditions facing the Company and the global economy. In
particular:
- Changes in the market for e-commerce companies in China have adversely affected the operating
and financial performance of the Company. With accelerating
industry consolidation, further centralization of internet traffic
to large players and stronger market competitors, e-commerce
companies like the Company are facing more significant challenges
in terms of their growth potential. The Company's market share has
been further eroded by the outperforming growth of certain large
competitors in China in book sales
in 2015. The growth rate of the Company's total net revenues in
2015 was the lowest over the past three fiscal years, and the
growth rate of the Company's revenues from sales of books and other
media products declined for three consecutive fiscal years from
2013 to 2015. The Company's other revenue including revenue from
third-party merchants participating in the marketplace program
declined by 7% year-over-year in 2015. The Company's gross margin
declined by 2.4% year-over-year in 2015. We believe that the recent
operating and financial performance of the Company has had a
negative impact on its value.
- The global financial markets have experienced significant
volatility recently, including substantial volatility in equity
securities markets, which has been reflected in the performance of
the Company's ADSs. In particular, the closing price of the
Company's ADSs has decreased to US$5.34 (May 16,
2016). We believe that a prolonged timeline for negotiating
the Acquisition may create substantial uncertainties to the price
of the Company's ADSs, and the Acquisition would allow the
Company's shareholders to immediately realize a certain value for
all of their Shares and/or ADSs.
- The recent economic slowdown in China and challenges to the macroeconomic
environment are expected to be sustained, with the RMB under strong
depreciation pressure. China's GDP
growth in the fourth quarter of 2015 has decreased to a six-year
low of 6.8% and may further decrease to 6.3% in 2016, according to
IMF's forecast. Since the announcement of the Original Proposal on
July 9, 2015, RMB has depreciated
against U.S. dollar from RMB6.2086
per USD (July 9, 2015) to
RMB6.5285 per USD (May 13, 2016), a 5.2% drop in approximately ten
months, according to the exchange rates issued by the Federal
Reserve Board. The depreciation trend of RMB is expected to
continue, resulting in a negative impact on the valuation of the
Company in USD terms. Furthermore, our cost of funding associated
with the financing for the Acquisition rises with a stronger U.S.
dollar.
In closing, we continue to be fully committed to close the
Acquisition and believe that the Acquisition provides full value to
the Company's shareholders. We hope that the Special Committee will
give prompt consideration to our proposal, and we are prepared to
execute definitive agreements on an expedited basis and work
together with the Special Committee to bring this Acquisition to a
successful and timely conclusion.
Should you have any questions regarding this proposal, please do
not hesitate to contact the undersigned.
/s/ Peggy Yu
Yu
Peggy Yu Yu
/s/ Guoqing
Li
Guoqing Li
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SOURCE E-Commerce China Dangdang Inc.