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CNinsure Says CEO-led Group Withdrew 'Going Private' Offer; Shares Down - Update

Shares of CNinsure Inc. (CISG) are currently trading around 27 percent lower on Nasdaq, after the Chinese insurance intermediary company said that its CEO-led group withdrew non-binding going private proposal, citing challenging market conditions.

In its statement, CNinsure said its Special Committee of its Board of Directors obtained a notice from TPG Asia V MU, Inc., Kingsford Resources Ltd., and CDH Inservice Ltd. that they have unanimously determined to withdraw the proposal received in May. Kingsford is controlled by CNinsure Chairman and Chief Executive Officer Yinan Hu and entities affiliated with him.

It was on May 16 that CNinsure said its Board has received a letter from the CEO-led group of a preliminary non-binding proposal to acquire the remaining stake in CNinsure in a going private transaction for $19 per ADS, or $0.95 per ordinary share, in cash, subject to certain conditions. Kingsford and CDH then beneficially owned, in the aggregate, approximately 34.3 percent of the company's stake.

Cninsure then had said that its Board, other than Hu, Qiuping Lai and Shangzhi Wu, was reviewing and evaluating the proposal, and had said that there could be no assurance that any definitive offer or agreement would be made.

Hu today stated, "Recent market conditions and near term volatility have made for a challenging deal environment. Throughout the last four months, the Company has been conducting business as usual. We still have full confidence in the growth prospects of the Company in view of our strong cash position, industry leadership and well-proven growth model. We intend for the Company to continue to execute on its long-term growth strategies and to explore potential opportunities to maximize value for all shareholders."

In a different deal, Cninsure on August 31 said it has entered into definitive agreements to acquire insurance companies Guangzhou Huajie Insurance Agency Co., Ltd., or Huajie, and Dongguan Zhongxin Insurance Agency Co., Ltd., or Zhongxin, from Chengdu Jingshi Investment Co., Ltd.

CISG is currently trading at $7.83, down $2.84 or 26.62 percent.

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