TSX-V:CHO
TORONTO,
Oct. 24, 2013 /CNW/ - China Health
Labs & Diagnostics Ltd. ("China Health" or the "Company")
(TSXV:CHO) announced that its board of directors has received an
unsolicited non-binding proposal from Century Delight Investment
Limited ("Century Delight"), to acquire all of the outstanding
common shares of the Company not already owned by Century Delight
for cash consideration of $0.62 per
share (the "Transaction Proposal"). Century Delight is a
company indirectly owned and controlled by Mr. Shiping (Wilson) Yao, the Company's President
and Chief Executive Officer and a member of the Company's board of
directors. The Consideration offered under the Transaction
Proposal represents a premium of approximately 44% over the closing
price of the Company's shares listed on the TSX Venture Exchange on
October 23, 2013. Under the
Transaction Proposal, the privatization is proposed to be effected
by way of a share consolidation under the Companies Act
(Cayman Islands). Century
Delight owns, or has control or direction over, 47,009,266 common
shares representing approximately 72% of the Company's 65,606,686
common shares outstanding.
A special committee of independent directors (the "Special
Committee"), comprised of Paul Haber
(Chair), Hong Chang, Kim Oishi and Yumin
Zhuang, will consider and make recommendations regarding the
Transaction Proposal. The Special Committee has already
engaged Evans & Evans, Inc. as its independent valuator and
financial advisor and to prepare a valuation report and fairness
opinion with respect to the Transaction Proposal.
The Transaction Proposal is subject to a number of conditions
including confirmation of financing. Century Delight has
informed the Company that it is seeking financing, but that it has
not yet entered into a binding financing agreement. Any
transaction under the Transaction Proposal would also be subject to
a number of conditions including receipt of all regulatory and
shareholder approvals including the approval of at least a majority
of the votes cast by minority shareholders (other than Mr. Yao and
his affiliates and associates and other joint actors) of the
Company.
The Company has only received the Transaction Proposal and the
Company's board of directors has made no determination as to the
Company's response to the proposal. The Transaction Proposal
is non-binding and there is no assurance that any transaction will
be completed or, if completed, on the terms as proposed. The
Company will provide further updates as material information
becomes available.
About China Health Labs & Diagnostics Ltd.
China Health, operating in China as the Biochem Group, is a leading
diagnostic lab solution provider for the public healthcare industry
in China. The Company develops and
sells Biochem Group branded and third-party medical diagnostic
products and services to diagnostic facilities in China. Customers include large urban
hospitals, rural hospitals, Chinese military and rescue operations,
the Beijing government and
third-party distributors.
In 2012, China Health had revenue of approximately $45.8 million, and intends to expand its business
by focusing its efforts on expanding its sales network in three
areas where it provides proprietary solutions, has limited
competition and that are supported by Chinese government policy and
budgets: BK Clinlab total lab solutions for rural hospitals and
clinics, POCT solutions for military and emergency rescue services,
and food safety solutions for large cities in China.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
FORWARD LOOKING INFORMATION
This news release contains forward-looking
statements and information that are based on the beliefs of
management and reflect China Health's current expectations.
When used in this news release, the words "estimate", "project",
"belief", "anticipate", "intend", "expect", "plan", "predict",
"may" or "should" and the negative of these words or such
variations thereon or comparable terminology are intended to
identify forward-looking statements and information. The
forward-looking statements and information in this news release
includes information relating to the method of effecting the
privatization, the consideration and making recommendations by the
Special Committee regarding the Transaction Proposal, and the
expansion of the Company's business by focusing on expanding its
sales network to areas where it has proprietary products, limited
competition and strong government support. The
forward-looking information is based on certain assumptions, which
could change materially in the future, including the assumption
that the Company's products and services, operations, market,
marketing plans and strategies, competitive conditions, future
developments and proprietary protections continue as
projected. Such statements and information reflect the
current view of China Health with respect to risks and
uncertainties that may cause actual results to differ materially
from those contemplated in those forward-looking statements and
information. By their nature, forward-looking statements
involve known and unknown risks, uncertainties and other factors
which may cause our actual results, performance or achievements, or
other future events, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among
others, the risk that the Transaction may be withdrawn, the Company
may not be able to expand its business as expected through its
sales network in any of the areas in which it has proprietary
products, limited competition and strong government support.
These and other risks are further described under "Risk Factors" in
the Company's management's discussion and analysis dated
April 30, 2013, which is available on
SEDAR and may be accessed at www.sedar.com. When relying on
China Health's forward-looking statements and information to make
decisions, investors and others should carefully consider the
foregoing factors and other uncertainties and potential
events. China Health has assumed a certain progression, which
may not be realized. It has also assumed that the material
factors referred to above will not cause such forward-looking
statements and information to differ materially from actual results
or events. However, the list of these factors is not
exhaustive and is subject to change and there can be no assurance
that such assumptions will reflect the actual outcome of such items
or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE
REPRESENTS THE EXPECTATIONS OF CHINA HEALTH AS OF THE DATE OF THIS NEWS
RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE.
READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING
INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY
OTHER DATE. WHILE CHINA HEALTH MAY
ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY
PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE
LAWS.
SOURCE CHINA HEALTH LABS &
DIAGNOSTICS