Fushi Shares Soar On Go-Private Deal - Update

6/28/2012 8:22 PM ET

China-based Fushi Copperweld Inc. (FSIN: Quote), Thursday agreed to be taken private by affiliates of its chairman and co-CEO Li Fu and Abax Global Capital Limited for $9.50 per share in cash. Following the news, Fushi shares surged more than 13 percent in extended session on the Nasdaq.

The $9.50 per share offer price holds a premium of more than 21 percent against Fushi's closing price of $7.85 on Thursday. The transaction is expected to close in the fourth quarter 2012, subject to customary conditions.

The deal comes after much dilly-dallying between the concerned parties. Fu and Abax in November 2010 offered to acquire Fushi for $11.50 per share, but the deal did not get through. A year later, the offer price was slashed to $9.25 per share.

A sweetened bid cropped up last December, with Fu and Abax offering $9.50 per share, prompting Fushi to mull over the proposal for the past months.

As per a statement today by Fushi, each share of its common stock immediately prior to the time of the merger will be converted into the right to receive $9.50 in cash without interest.

But this will not be applicable to shares owned by Fu, Abax and respective affiliates, who together hold about 29.4 percent stake in Fushi.

The merger is subject to approval by Fushi shareholders - including the approval of the holders of at least 60 percent of the outstanding Fushi shares not owned by Fu, Abax and respective affiliates. Upon closing of the merger, Fushi will become a privately-held company and its common stock will no longer be listed.

Fu and Abax have secured debt financing from China Development Bank Corporation Hong Kong Branch to finance the deal.

Fushi Copperweld is a manufacturer of copper-clad bimetallic engineered conductor products.

FSIN closed Thursday at $7.85, down $0.15 or 1.88%, on the Nasdaq. In after hours, the stock gained $1.06 or 13.50%.

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by RTT Staff Writer

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