China Nuokang Bio-Pharmaceutical Inc. (Nasdaq:NKBP) ("Nuokang" or
the "Company"), a leading China-based biopharmaceutical company
focused on the research, development, manufacture, marketing and
sales of hospital-based medical products, today announced that its
board of directors has received a preliminary, non-binding proposal
from Mr. Baizhong Xue, chairman of the board and chief executive
officer of Nuokang, to acquire all of the outstanding ordinary
shares of the Company not currently owned, legally or beneficially,
by Mr. Xue and companies controlled by Mr. Xue in cash at a
proposed price of $5.80 per American depositary share (each
outstanding Nuokang American depositary share represents eight
Nuokang ordinary shares). Mr. Xue currently beneficially owns
approximately 61.2% of the Company's ordinary shares (excluding
share options of the Company). Please refer to the enclosed Exhibit
A for a copy of the proposal.
The Company's board of directors intends to form a special
committee of independent directors to consider the proposal. There
can be no assurance that any definitive offer will be made, that
any agreement will be executed or that a transaction with Mr. Xue
or any other transaction will be approved or consummated.
About China Nuokang Bio-Pharmaceutical Inc.
China Nuokang Bio-Pharmaceutical Inc. (Nasdaq:NKBP) is a leading
biopharmaceutical company in China focused on the research,
development, manufacture, marketing and sales of hospital-based
medical products. The Company provides a diversified portfolio of
products across more than 4,200 hospitals in China. Nuokang's
principal products include Baquting®, China's leading hemocoagulase
product by market share; Kaitong®, a lipid emulsion alprostadil
product for the treatment of peripheral vascular diseases,
cardiocerebral microcirculation disorders and post-surgery
thrombosis; and alpha lipoic acid capsules, or ALA, an antioxidant
product that addresses diabetic neuropathy. The Company's product
pipeline includes product candidates under development in
hematological, cardiovascular and cerebrovascular disease
diagnosis, treatment and prevention. Please visit www.nkbp.com for
more information.
Safe-Harbor Statement
This press release contains statements of a forward-looking
nature. These statements are made under the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995,
including certain plans, expectations, goals, and projections,
which are subject to numerous assumptions, risks, and
uncertainties. These forward-looking statements may include, but
are not limited to, statements containing words such as "may,"
"could," "would," "plan," "anticipate," "believe," "estimate,"
"predict," "potential," "expects," "intends" and "future" or
similar expressions. Among other things, the statements relating to
the Company's expected progress on the product portfolio and future
financial results may contain forward-looking statements. These
forward-looking statements speak only as of the date of this press
release and are subject to change at any time. These
forward-looking statements are based upon management's current
expectations and are subject to a number of risks, uncertainties
and contingencies, many of which are beyond the Company's control
that may cause actual results, levels of activity, performance or
achievements to differ materially from any future results, levels
of activity, performance or achievements expressed or implied by
such forward-looking statements. The Company's actual results could
differ materially from those contained in the forward-looking
statements due to a number of factors, including those described
under the heading "Risk Factors" in the Company's filings with the
U.S. Securities and Exchange Commission, including its annual
report on Form 20-F.
Exhibit A: Text of the Proposal
Dear Members of the Board of Directors,
I, Baizhong Xue, the chairman and chief executive officer of
China Nuokang Bio-Pharmaceutical Inc. (the "Company"), am pleased
to submit this preliminary non-binding proposal (the "Proposal") to
acquire all of the outstanding ordinary shares of the Company not
already owned by myself and companies controlled by me in a "going
private" transaction on the principal terms and conditions
described in this letter (the "Transaction").
Set forth below are the key terms of my Proposal.
I. Transaction and Purchase Price
I propose to acquire all of the outstanding ordinary shares of
the Company not already owned by me and my controlled companies at
a purchase price equal to US$5.80 per ADS in cash through a
one-step merger. This price per ADS represents a premium of 56.8%
to the closing price of the Company's ADSs on May 8, 2012 and a
premium of 64.8% to the 30-trading-day average closing price.
II. Ownership
I, together with Britain Ukan Technology Investment Holdings
(Group) Limited and Anglo China Bio-technology Investment Holdings
Limited, both of which are companies controlled by me, currently
own, in the aggregate, 94,508,704 ordinary shares, or approximately
61.2% of the outstanding shares of the Company (excluding share
options of the Company). Please also note that I am currently
interested only in pursuing the Transaction and am not interested
in selling my shares in any other transaction involving the
Company.
III. Source of Financing
I have been in discussions with an investor regarding financing
for the Transaction, and I expect a commitment for the financing to
be in place when the definitive agreements are signed. My Proposal
will not be subject to any financing contingencies. The
Company's public shareholders will receive 100% of the purchase
price in cash at closing.
IV. Due Diligence
My Proposal is subject to, among other things, the completion,
to the satisfaction of myself and my financing source, of customary
due diligence. I and my financing source would expect to be granted
full access to the Company's books, records, properties and
management as well as meetings with the Company's accountants, key
customers and other business relations. We would plan to complete
our due diligence within four weeks from the date we gain access to
the necessary documentation and personnel.
V. Definitive Documentation
Consummation of the Transaction would require negotiation and
execution of a definitive merger agreement, as well as other
customary agreements for a transaction of this nature, each
containing terms and conditions appropriate for transactions of
this type. I have retained Kirkland & Ellis International LLP
as my international legal counsel and am prepared to provide draft
agreements promptly. I anticipate that definitive agreements can be
negotiated and agreed in parallel to our due diligence
process.
VI. Process
I recognize that the board of directors will evaluate the
Proposal independently before it can make a decision to endorse it.
Given my involvement, I would expect that the independent members
of the board of directors will proceed to consider my Proposal and
the Transaction.
VII. Miscellaneous
This Proposal is not a binding offer, agreement or agreement to
make a binding offer or agreement at any point in the future. This
letter is a preliminary indication of interest by me and does not
contain all matters upon which agreement must be reached in order
to consummate the proposed Transaction, nor does it create any
binding rights or obligations in favor of any person. I will be
bound only upon the execution of mutually agreeable definitive
documentation. This Proposal is governed by and construed in
accordance with the laws of Hong Kong.
VIII. Confidentiality
I am sure you will agree that it is in all of our interests to
ensure that we proceed in a confidential manner, unless otherwise
required by law, until we have executed definitive agreements.
Sincerely,
/s/ Baizhong Xue Baizhong Xue
CONTACT: China Nuokang Bio-Pharmaceutical Inc.
Mr. Steven Duan
Vice President of Investor Relations
Email: dsz@nkbp.com
ICR, Inc.
Mr. Rob Koepp
Tel: (+86) 10-6583-7516 or (646) 405-5180
Email: robert.koepp@icrinc.com
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