JA Solar Holdings disclosed that its Chairman and CEO Baofang Jin and Jinglong Group offered to purchase the company for $9.68 per American Depositary Share (ADS) in a going private transaction.
The proposed acquisition price represents a 20% premium to the closing price of JA Solar’s ADS on Thursday. The stock was trading $9.12 per ADS, up by more than 12% around 1:39 in the afternoon in New York on Friday.
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Details of the proposal
Mr. Jin said his group planned to form an acquisition vehicle to implement the acquisition. His group wants to merge JA Solar with the acquisition vehicle. According to him, they plan to finance the deal with a combination of debt and equity capital.
Mr. Jin added that the parties that will provide financing for the acquisition would require a timely opportunity to conduct customary due diligence on JA Solar. He requested the board of the company to accommodate a due diligence request and provide confidential information related to its business subject to a confidential agreement.
“We believe that the Acquisition will provide superior value to the company’s shareholders. You should be aware that we are interested only in acquiring the outstanding shares the buyer group does not already own, and that we do not intend to sell our stake in the company to a third party,” said Mr. Jin.
Currently, Mr, Jin and Jinglong Group beneficially own 15.6% stake in JA Solar. Mr. Jin is the sole director of Jinglong Group.
JA Solar to form a special committee to review the proposal
JA Solar plans to create a special committee consisting of independent directors to review the buyout proposal. The board of directors of the company clarified that Mr. Jin’s proposal is non-binding, and it has not made any decision regarding the matter.
“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,” according to JA Solar in a statement.
JA Solar is one of the leading manufacturers of high-performance solar products in China.