BEIJING, May 1, 2020 /PRNewswire/ -- Gridsum Holding Inc.
("Gridsum" or the "Company") (NASDAQ: GSUM), a leading provider of
cloud-based big-data analytics and artificial intelligence ("AI")
solutions in China, today
announced that its Board of Directors (the "Board") has received a
revised non-binding proposal letter, dated May 1, 2020, from Guosheng Qi, Chairman of the
Board and the Chief Executive Officer of the Company, Guofa Yu, a director and the Chief Operating
Officer of the Company, their respective affiliated entities, Beta
Dynamic Limited, Shenzhen Qianhai Banyan Capital Investment &
Management Co., Ltd and Hangzhou Yutao Capital Co., Ltd
(collectively, the "Consortium Members"), proposing to acquire all
of the outstanding shares of the Company that are not already owned
by the Consortium Members in a going
private transaction (the "Transaction") for US$2.00 in cash per American depositary share
(each representing one Class B ordinary share of the Company), or
US$2.00 in cash per ordinary share. A
copy of the revised non-binding proposal letter is attached as
Exhibit A to this press release.
The special committee of the Board (the "Special Committee"),
formed to consider the original proposal from certain of the
Consortium Members and any other alternative transactions, is
evaluating the revised proposal with the assistance of its
financial and legal advisors. The Board and the Special Committee
caution 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 Company's
response to the revised proposal. There can be no assurance that
any definitive offer will be made, that any agreement will be
executed, or that this or any other transaction will be approved or
consummated.
About Gridsum
Gridsum Holding Inc. (NASDAQ: GSUM) is a leading provider of
cloud-based big-data analytics and AI solutions for
multinational and domestic enterprises and government agencies in
China. Gridsum's core technology,
the Gridsum Big Data Platform and the Gridsum Prophet:
Enterprise AI Engine, is built on a distributed computing framework
and performs real-time multi-dimensional correlation analysis of
both structured and unstructured data. This enables Gridsum's
customers to identify complex relationships within their data and
gain new insights that help them make better business decisions.
The Company is named "Gridsum" to symbolize the combination of
distributed computing (Grid) and analytics (sum). As a digital
intelligence pioneer, the Company's mission is to help enterprises
and government organizations in China use data in new and powerful ways to
make better informed decisions and be more productive.
Safe Harbor Statement
This announcement contains forward-looking statements. These
forward-looking statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These statements can be identified by terminology such as
"may," "will," "expects," "anticipates," "aims," "future,"
"intends," "plans," "believes," "estimates," "likely to" and
similar statements. These forward-looking statements involve known
and unknown risks and uncertainties and are based on current
expectations and assumptions about Gridsum and the non-binding
proposal. Further information regarding risks and uncertainties
faced by Gridsum is included in Gridsum's annual report on
Form 20-F and other reports filed with, or furnished to,
the U.S. Securities and Exchange Commission. All information
provided in this press release is as of the date of this press
release, and Gridsum undertakes no duty to update such information
except as required under applicable law.
Investor Relations
Gridsum
ir@gridsum.com
Christensen
In China
Mr. Christian Arnell
Phone: +86-10-5900-1548
Email: carnell@christensenir.com
In U.S.
Mr. Tip Fleming
Phone: +1 917 412 3333
Email: tfleming@christensenir.com
Exhibit A
May 1, 2020
The Board of Directors
Gridsum Holding Inc.
South Wing, High Technology Building
No. 229 North 4th Ring Road
Haidian District, Beijing 100083,
People's Republic of China
Dear Sirs:
Reference is made to the non-binding preliminary proposal made
by (i) Mr. Guosheng Qi, Mr. Guofa Yu and their respective
affiliated entities (collectively, the "Management"),
(ii) Beta Dynamic Limited (the "Initial Sponsor"), an
affiliate of Hammer Capital Private Investments Limited, on
July 15, 2019 (the "Original
Proposal"), pursuant to which the Management and the
Initial Sponsor proposed to acquire all of the outstanding shares
of Gridsum Holding Inc. (the "Company") that are not
already owned by the consortium 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
board of directors of the Company and its advisors so far with
respect to the Acquisition. We are submitting this revised
non-binding proposal to reaffirm our interests in the Acquisition
that we are interested only in acquiring the outstanding shares
that we do not beneficially own. Set forth below are the key terms
of our revised proposal:
1. Consortium. The consortium (the "Consortium")
currently consists of the following members (collectively, the
"Consortium Members"):
(a) the Management,
(b) the Initial Sponsor,
(c) Shenzhen Qianhai Banyan Capital Investment &
Management Co., Ltd, and
(d) Hangzhou Yutao Capital Co., Ltd
(杭州煜韬资产管理合伙企业(有限合伙)).
2. Purchase Price. We would like to revise our offer price (the
"Offer Price") to US$2.00 in cash per American depositary share of
the Company ("ADS", each representing one ordinary
share of the Company), or US$2.00 in
cash per ordinary share (in each case other than those ADSs or
ordinary shares held by the Consortium Members that may be rolled
over in connection with the Acquisition). 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 Chinese economy. In particular,
(a) The global financial markets have experienced
significant volatility recently, including substantial volatility
in equity securities markets, and volatility and tightening of
liquidity in credit markets. As a result, the trading price of the
Company's ADS has decreased significantly since the Original
Proposal.
(b) Since the Original Proposal, the Company has
experienced weaker than expected financial and operational
performance as identified, among others, in the Company's earnings
releases since the Original Proposal. According to the Company's
earnings release for the third quarter of 2019, the Company's net
revenues decreased 25%, to RMB60.1 million (US$8.4 million), from RMB80.5
million in the comparable period of 2018; and the gross profit
decreased 32%, to RMB38.8 million (US$5.4 million), from RMB56.8
million in the comparable period of 2018. In addition, the
material adverse impact on the Company's performance and operations
caused by the outbreak of COVID-19 is expected to continue
throughout 2020. We believe that such deterioration in the
Company's business has had a significant negative impact on the
value of the Company.
(c) The recent statement given by the chairman of
the Securities and Exchange Commission and the chairman of the
Public Company Accounting Oversight Board warning the disclosure,
financial reporting and other risks of Chinese listed companies, as
well as the evolving trade tension between the U.S. and China, are
expected to lead to lower valuation of the Company by the U.S.
stock markets.
3. No Binding Commitment. This letter constitutes only a
preliminary indication of our interest, and does not constitute any
binding commitment with respect to the Acquisition. A binding
commitment will result only from the execution of definitive
agreements, and then will be on terms and conditions provided in
such documentation.
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 look forward to continuing working
with the Special Committee and its advisors.
Should you have any questions regarding this proposal, please do
not hesitate to contact us. We look forward to hearing from
you.
* * *
Sincerely,
Guosheng Qi
/s/ Guosheng
Qi
Generation Gospel Limited
By:
/s/ Guosheng
Qi
Name: Guosheng Qi
Title:
Director
Fairy Sprit Limited
By:
/s/ Guosheng
Qi
Name: Guosheng Qi
Title:
Director
Guofa Yu
/s/ Guofa
Yu
Garden Enterprises Ltd.
By:
/s/ Guofa
Yu
Name: Guofa Yu
Title:
Director
Beta Dynamic Limited
By:
/s/ CHEUNG Siu Fai
Name: CHEUNG Siu Fai
Title:
Director
Shenzhen Qianhai Banyan Capital Investment & Management
Co., Ltd
By:
/s/ Xiangming
Qu
Name: Xiangming Qu
Title:
Authorized Signatory
Hangzhou Yutao Capital Co., Ltd
By:
/s/ Zhang
Chuanjun
Name: Zhang Chuanjun
Title:
Authorized Signatory
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SOURCE Gridsum Holding Inc.