China-based ShangPharma Corp. (SHP: Quote) Friday said it has received a non-binding proposal letter from its Chairman and Chief Executive Officer Michael Xin Hui, and TPG Star Charisma Ltd. and its affiliates, to buy all of the outstanding shares of ShangPharma not currently owned by them. The shares are currently up about 19 percent on the NYSE.
The "going private" transaction is valued between $8.50 and $9.50 per American Depositary Share, or ADS, in cash, subject to certain conditions.
The pharmaceutical and biotechnology research and development outsourcing company noted that Hui and TPG currently own about 54 and 11 percent of ShangPharma's shares, respectively. ShangPharma stated that its board of directors has formed a special committee of independent directors to consider the proposal.
The company said its board has just received the non-binding proposal and no decisions have been made by the independent committee. ShangPharma added that there can be no assurance that any definitive offer will be made, any agreement will be executed or that this or any other transaction will be approved or consummated.
According to the proposal letter, the acquisition is intended to be financed through a combination of debt and equity capital, the company added.
SHP is currently trading at $8.18, up 18.9 percent, on a volume of 22 thousand shares, against a three-month average volume of 12 thousand shares.
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by RTT Staff Writer
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