Shareholders reject MSPEA-backed Yongye privatization

According to a filing, the deal failed to get majority approval following a vote at a special meeting of shareholders yesterday. Under the terms of proposed transaction - which received board approval in September - Yongye's chairman and CEO, Zishen Wu, MSPEA and related entities were to buy all outstanding American Depository Shares for $6.69 apiece in cash - a 39.7% premium to the company's closing price before the proposal was received. The buyers initially offered $6.60 per share.

"We remain confident about Yongye's business prospects and believe that the company continues to be very well positioned for sustainable long-term growth," said Wu in a stement. "The Board of Directors and management team look forward to working closely together to explore all appropriate opportunities to maximize value for all of our stockholders."

Shares in Yongye fell 11% following the vote yesterday from $6.55 to $5.85 apiece.

MSPEA - which was unavailable for comment - invested $50 million in Yongye in June 2011 and then bought a further $11 million worth of shares on the open market. As of year-end 2011, MSPEA is understood to have held a 12% stake in the company through common shares and preferred shares on a converted basis.

Beijing-based Yongye claims to be the leading crop nutrient company in China based on total sales in 2012, with production facilities located in Inner Mongolia. Its principal product is a liquid crop nutrient but the company also produces a powder animal nutrient for dairy cows. Both are sold under the "Shengmingsu" brand.

Yongye posted a net income of $99 million for 2012 against sales of $390.4 million. This compared income and sales of $89.8 million and $214.1 million the previous year.

 

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• Topics
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• buyout
• Morgan Stanley Private Equity Asia
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