CHANGGE and BEIJING, China,
March 27, 2012
/PRNewswire-Asia-FirstCall/ -- Zhongpin Inc. (NASDAQ: HOGS)
("Zhongpin" or the "Company"), a leading meat and food processing
company in the People's Republic of
China, today announced that its Board of Directors has
received a preliminary, non-binding proposal from its Chairman and
Chief Executive Officer, Mr. Xianfu
Zhu ("Mr. Zhu"), which stated that Mr. Zhu intends to
acquire all of the outstanding shares of the Company's common stock
not currently owned by him in a going private transaction at a
proposed price of $13.50 per share in
cash. Mr. Zhu currently beneficially owns approximately 17.5% of
the Company's common stock. A copy of the proposal letter is
attached hereto as Exhibit A.
The Company's Board of Directors intends to form a special
committee of independent directors to consider this proposal and
any additional proposal that may be made by Mr. Zhu and his
affiliates, if any. There can be no assurance that any definitive
offer will be made, that any agreement will be executed or that a
transaction with Mr. Zhu or any other transaction will be approved
or consummated.
About Zhongpin
Zhongpin Inc. is a leading meat and food processing company that
specializes in pork and pork products, vegetables, and fruits in
China. Its distribution network in
China covers 20 provinces plus
Beijing, Shanghai, Tianjin, and Chongqing and includes 3,428 retail outlets as
of December 31, 2011. Zhongpin's
export markets include Europe,
Hong Kong, and other countries in
Asia. For more information about
Zhongpin, please visit Zhongpin's website at
http://www.zpfood.com.
Safe harbor statement
Certain statements in this news release may be forward-looking
statements made under the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Zhongpin has based its
forward-looking statements largely on its current expectations and
projections about future events and trends that it believes may
affect its business strategy, results of operations, financial
condition, and financing needs.
These projections involve risks and uncertainties that could
cause actual results to differ materially from those in the
forward-looking statements, which may include but are not limited
to such factors as downturns in the Chinese economy, unanticipated
changes in product demand, interruptions in the supply of live pigs
and or raw pork, the effects of weather on hog feed production,
poor performance of the retail distribution network, delivery
delays, freezer facility malfunctions, Zhongpin's ability to build
and commence new production facilities according to intended
timelines, the ability to prepare Zhongpin for growth, the ability
to predict Zhongpin's future financial performance and financing
ability, changes in regulations, and other information detailed in
Zhongpin's filings with the United States Securities and Exchange
Commission. These filings are available from www.sec.gov or from
Zhongpin's website at www.zpfood.com.
You are urged to consider these factors carefully in evaluating
Zhongpin's forward-looking statements and are cautioned not to
place undue reliance on those forward-looking statements, which are
qualified in their entirety by this cautionary statement. All
information provided in this news release is as of the date of this
release. Zhongpin does not undertake any obligation to update any
forward-looking statement as a result of new information, future
events, or otherwise, except as required by law.
For more information, please contact:
Zhongpin Inc.
Mr. Sterling Song (English and
Chinese)
Director of Investor Relations
Telephone +86 10 8286 1788 extension 101 in Beijing
ir@zhongpin.com
Mr. Warren (Feng) Wang (English
and Chinese)
Chief Financial Officer
Telephone +86 10 8286 1788 in Beijing
warren.wang@zhongpin.com
Christensen
Mr. Julian (Yujia) Zhao (English
and Chinese)
Telephone +86 10 5826 4727 in Beijing
yzhao@christensenir.com
Mr. Tom Myers (English)
Mobile +86 139 1141 3520 in Beijing
tmyers@christensenir.com
PROPOSAL LETTER
March 27, 2012
Board of Directors
Zhongpin Inc.
21 Changshe Road, Changge City
Henan Province
China 461500
Dear Sirs:
I, Xianfu Zhu, am pleased to
submit this preliminary non-binding proposal (the "Proposal") to
acquire all of the common stock of Zhongpin Inc. (the "Company")
that are not currently owned by me in a going-private transaction
(the "Acquisition").
I believe that my proposal of $13.50 in cash per share of common stock of the
Company, will provide a very attractive alternative to the
Company's public stockholders. My proposal represents a premium of
approximately 46.5% to the volume-weighted average closing price
during the last 30 trading days and a premium of approximately
46.6% to the Company's closing price on March 26, 2012.
The terms and conditions upon which I am prepared to pursue the
Acquisition are set forth below. I am confident that an Acquisition
can be closed on the basis as outlined in this letter.
1. Purchase Price.
The consideration payable for each share of common stock of the
Company (other than those held by me and my affiliates) will be
$13.50 in cash.
2. Financing.
I intend to finance the Transaction with a combination of debt
and equity capital. A portion of the equity financing would be
provided from my existing holdings of common stock of the
Company. I will also immediately commence discussions with
potential sources of financing (both debt and equity) and with
certain stockholders of the Company, and may make agreements with
them relating to possible investments in the Acquisition.
At this time there is no arrangement whatsoever
with any stockholder of the Company or potential source of debt or
equity financing for the Acquisition, and I do not propose to make
any commitment prior to reaching transaction terms approved by the
board of directors of the Company.
3. Due Diligence.
Parties providing financing will require a timely opportunity to
conduct customary due diligence on the Company. I would like
to ask the board of directors of the Company to accommodate such
due diligence request and approve the provision of confidential
information relating to the Company and its business to possible
sources of equity and debt financing under a customary form of
confidentiality agreement.
4. Definitive Agreements.
I am prepared to negotiate and finalize definitive agreements
(the "Definitive Agreements") providing for the Acquisition and
related transactions very promptly. These documents will provide
for covenants and conditions typical and appropriate for
transactions of this type.
5. Confidentiality.
I am sure you will agree that it is in all of our interests to
proceed in a confidential manner, other than as required by law,
until definitive agreements providing for a transaction have been
executed or we have terminated our discussions.
6. Process.
I believe that the Acquisition will provide superior value to
the Company's public stockholders. I recognize that the board of
directors of the Company will evaluate the Proposal independently
before it can make its determination to endorse the Acquisition.
Given my involvement in the proposed Acquisition, I also recognize
that independent members of the Board will proceed to consider the
proposed Acquisition. In considering my offer, you should be aware
that I am interested only in acquiring the common stock of the
Company that I do not already own, and that I do not intend to sell
my stake in the Company to a third party.
7. Advisors.
I have retained Skadden, Arps, Slate, Meagher & Flom LLP as
my legal counsel in connection with the Proposal and the
Acquisition.
8. No Binding Commitment.
This Proposal does not constitute any binding commitment with
respect to the Acquisition or any other transaction. Any
commitment will result only from the execution of Definitive
Agreements, and then will be on the terms provided in such
documentation.
In closing, I would like to personally express my sincerity to
work with the board of directors of the Company to bring this
Acquisition to a successful and timely
conclusion. Should you have any questions regarding
these matters, please do not hesitate to contact me.
Sincerely,
/s/ Xianfu Zhu
Xianfu Zhu
SOURCE Zhongpin Inc.