SHANGHAI, June 17,
2022 /PRNewswire/ -- LAIX
Inc. ("LAIX" or the "Company") (OTC:
LAIXY), an artificial intelligence (AI) company in
China that creates and delivers
products and services to popularize English learning, today
announced that it has entered into a definitive Agreement and Plan
of Merger (the "Merger Agreement") with Laix Infinite
Co. Ltd., an exempted company incorporated with limited liability
under the laws of the Cayman
Islands ("Parent"), and Prilingo Merger
Limited, an exempted company incorporated with limited liability
under the laws of the Cayman
Islands and a wholly-owned subsidiary of Parent ("Merger
Sub"), pursuant to which Merger Sub will be merged with and into
the Company, with the Company continuing as the surviving company
and becoming a wholly-owned subsidiary of Parent (the "Merger"), in
a transaction implying an equity value of the Company of
approximately US$6.8 million for all
of the Company's outstanding ordinary shares (each, an "Ordinary
Share").
Certain shareholders of the Company, including the entities
ultimately controlled by Mr. Yi
Wang, co-founder, chairman of the board of directors (the
"Board") and chief executive officer of LAIX, Mr. Zheren Hu,
co-founder, director and chief technology officer of LAIX, Mr.
Hui Lin, co-founder, director and
chief scientist of LAIX, respectively (collectively, the
"Founders"), GGV Capital IV L.P., GGV Capital IV Entrepreneurs Fund
L.P., GGV Capital Select L.P., IDG Technology Venture Investment
IV, L.P., IDG Technology Venture Investment V, L.P., IDG-Accel
China Growth Fund III L.P., IDG-Accel China III Investors L.P.,
Trustbridge Partners V, L.P., CMC Lullaby Holdings Limited, Mirae
Asset – Naver Asia Growth Investment Pte. Ltd., Cherubic Ventures
SSG II Ltd and Best Venture Technology Limited (collectively, the
"Rollover Shareholders," and each, a "Rollover Shareholder") have
entered into Rollover and Contribution Agreements, respectively,
pursuant to which each Rollover Shareholder has irrevocably agreed
to contribute the Ordinary Shares it holds or will hold to the
Merger Sub prior to the effective time of the Merger (the
"Effective Time") in exchange for newly issued ordinary shares of
Parent, such that Merger Sub will hold approximately 93.8% of the
voting power of the Ordinary Shares exercisable in a general
meeting of the Company.
At the Effective Time, unless otherwise agreed under the Merger
Agreement, each Ordinary Share issued and outstanding immediately
prior to the Effective Time will be cancelled and cease to exist in
exchange for the right to receive US$0.1357 in cash without interest (the "Per
Share Merger Consideration"), and each outstanding American
depositary share of the Company ("ADS," each representing fourteen
Class A ordinary shares of the Company), together with the Class A
ordinary shares represented by such ADSs, will be cancelled and
cease to exist in exchange for the right to receive US$1.90 in cash without interest (together with
the Per Share Merger Consideration, the "Merger
Consideration").
The Merger Consideration represents a premium of approximately
15.8% to the volume-weighted average price of the ADSs during the
10 trading days prior to its receipt of the revised "going-private"
proposal letter dated April 28,
2022.
The buyer group (the "Buyer Group") comprises the Founders,
Tenzing Holdings 2011 Ltd. and Sino Avenue Limited. The Buyer Group
intends to fund the Merger with a combination of rollover equity
and cash, and has delivered copies of executed equity commitment
letters to the Company. Each member of the Buyer Group has also
executed and delivered to the Company a limited guarantee in favor
of the Company pursuant to which the Buyer Group is guaranteeing
certain payment obligations of Parent under the Merger
Agreement.
The Board, acting upon the unanimous recommendation of a
committee of two independent and disinterested directors
established by the Board (the "Special Committee"), approved the
Merger Agreement and the Merger. The Special Committee negotiated
the terms of the Merger Agreement with the assistance of its
financial and legal advisors. Because the Merger is a "short-form"
merger in accordance with section 233(7) of the Companies Act
between a parent company and one of its subsidiary companies (as
those terms are defined in the Companies Act), the Merger does not
require a shareholder vote or approval by special resolution of the
Company's shareholders if a copy of the Plan of Merger is provided
to every registered shareholder of the Company.
The Merger is currently expected to close in the second half of
2022 and is subject to customary closing conditions. If completed,
the Merger will result in the Company becoming a privately held
company, its ADSs will no longer be quoted on the OTC Market, and
the Company's ADS program will be terminated.
Houlihan Lokey (China) Limited is serving as financial advisor
to the Special Committee. Kirkland & Ellis is serving as U.S.
legal counsel to the Special Committee. Harney Westwood & Riegels is serving as
Cayman Islands legal counsel to
the Special Committee.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as U.S.
legal counsel to the Buyer Group. Maples and Calder (Hong Kong) LLP is serving as Cayman Islands legal counsel to the Buyer
Group.
Additional Information about the Merger
The Company will furnish to the U.S. Securities and Exchange
Commission (the "SEC") a current 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 Schedule 13E-3 transaction statement to its shareholders. The
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 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).
About LAIX Inc.
LAIX Inc. ("LAIX" or the "Company") is an artificial
intelligence (AI) company in China
that creates and delivers products and services to popularize
English learning. Its proprietary AI teacher utilizes cutting-edge
deep learning and adaptive learning technologies, big data,
well-established education pedagogies and the mobile internet. LAIX
believes its innovative approach fundamentally transforms learning.
LAIX provides its products and services on demand via its mobile
apps, primarily its flagship "English Liulishuo" mobile app
launched in 2013. On the Company's platform, AI technologies are
seamlessly integrated with diverse learning content incorporating
well-established language learning pedagogies, gamified features
and strong social elements to deliver an engaging, adaptive
learning experience. LAIX provides a variety of courses inspired by
a broad range of topics and culture themes to make English learning
more interesting and is committed to offering a fun, interactive
learning environment to motivate and engage its users.
For more information, please visit:
http://ir.laix.com.
Forward-looking Statements
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "aims," "future," "intends,"
"plans," "believes," "estimates," "confident," "potential,"
"continue" or other similar expressions. LAIX may also make written
or oral forward-looking statements in its periodic reports to the
U.S. Securities and Exchange Commission, in its annual report to
shareholders, in press releases and other written materials and in
oral statements made by its officers, directors or employees to
third parties. Statements that are not historical facts, including
but not limited to statements about LAIX's beliefs and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties, and a variety
of factors could cause actual results to differ materially from
those contained in any forward-looking statement, including but not
limited to the following: LAIX's goals and strategies; LAIX's
future business development, results of operations and financial
condition; the expected growth of the education market; LAIX's
ability to monetize the user base; fluctuations in general economic
and business conditions in China; PRC governmental policies, laws
and regulations relating to the Company's industry; the potential
impact of the COVID-19 to LAIX's business operations and the
economy in China and elsewhere
generally; the occurrence of any event, change or other
circumstances that could give rise to the right of any party to
terminate the definitive merger agreement for the going-private
transaction; the outcome of any legal proceedings that may be
instituted against LAIX Inc. or its shareholders or directors; the
ability to meet the closing conditions to the merger and the
going-private transaction; a delay in closing the merger and the
going-private transaction; business disruptions from the proposed
merger that will harm LAIX's business, including current plans and
operations; potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
merger and the going-private transaction; certain restrictions
during the pendency of the merger and the going-private
transactions that may impact LAIX's ability to pursue certain
business opportunities or strategic transactions; the ability of
LAIX to retain and hire key personnel; uncertainty as to the
long-term value of the ordinary shares of LAIX following the merger
and the going-private transaction; the continued availability of
capital and financing following the merger and the going-private
transaction; and assumptions underlying or related to any of the
foregoing. Further information regarding these and other risks is
included in the Company's filings with the U.S. Securities and
Exchange Commission. All information provided in this press release
is as of the date of the press release, and the Company undertakes
no duty to update such information, except as required under
applicable law.
For further information, please contact:
LAIX Inc.
Investor Relations
E-mail: ir@laix.com
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SOURCE LAIX Inc.