SHANGHAI, Dec. 10, 2012 /PRNewswire-FirstCall/ -- E-House ( China) Holdings Limited ("E-House" or the "Company") (NYSE: EJ), a leading real estate services company in China, today announced that it has received board authorization and approval to issue and sell ordinary shares to certain management personnel and use the expected proceeds from the share issuance to repurchase the Company's American depositary shares ("ADSs") on the open market.
The Company has received a letter of intent from Mr. Xin Zhou, co-chairman of the Company's board of directors and chief executive officer, on behalf of management to purchase up to an aggregate of 17,790,125 ordinary shares of the Company, which represent approximately 15% of the Company's current total outstanding share capital. The board of directors and the audit committee have authorized the Company to issue and sell up to an aggregate of 17,790,125 ordinary shares of the Company to Mr. Zhou and certain other management personnel of the Company for an aggregate purchase price of up to $62,621,240 at $3.52 per share, representing a 15% premium over $3.06, the closing price of the Company's ADSs on the New York Stock Exchange on December 7, 2012. Upon completion of the proposed share issuance, the Company's management team will become the Company's largest shareholder as a group, with a combined stake of approximately 30%. The management team has also indicated their willingness to undertake not to transfer or otherwise dispose of, directly or indirectly, any of the shares acquired in the proposed share issuance until 12 months following the consummation of the share issuance. Completion of the transaction is subject to the execution of definitive agreements between the Company and management as well as satisfaction of the closing conditions contained therein.
In addition, E-House has also been authorized by the board to use up to all of the expected proceeds from the share issuance to management to repurchase the Company's ADSs on the open market in compliance with applicable law, including Rule 10b-5 under the Securities Exchange Act of 1934, as amended. The timing and extent of any purchases will depend upon market conditions, the trading price of ADSs and other factors, and subject to the restrictions relating to volume, price and timing under applicable law. E-House expects to implement the share repurchases in a manner consistent with market conditions and the interests of its shareholders.