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March 22, 2013 /PRNewswire/ -- LJ International Inc. ("
LJI" or the "
Company"; NASDAQ: JADE), a foreign private issuer incorporated in the
British Virgin Islands and a leading colored gemstone and diamond jeweler with retail and wholesale businesses, today announced that it has entered into an agreement and plan of merger (the "
Merger Agreement") with Flora Bloom Holdings ("
Cayman Islands exempted company with limited liability, and Flora Fragrance Holdings Limited ("
Merger Sub"), a business company with limited liability incorporated under the laws of the
British Virgin Islands and a wholly-owned subsidiary of Parent, pursuant to which Parent will acquire the Company for
US$2.00 per ordinary share of the Company (the "
Transaction"). This transaction price represents a 24.2% premium over the closing price of the Company's ordinary shares on
August 10, 2012, the last trading day prior to the Company's public announcement that it had received a "going private" proposal, and a 29.0% premium over the volume weighted average price of the Company's ordinary shares over the 60 trading days ended on
August 10, 2012.
Immediately following the Transaction, Parent will be owned by a consortium of investors led by Mr.
Yu Chuan Yih, Chairman and Chief Executive Officer of the Company ("
Mr. Yih") and including (i) Urban Prosperity Holding Limited, an entity owned and controlled by FountainVest China Growth Capital Fund, L.P. and its parallel funds and affiliates, (ii) Mr.
Peter Au, Ms.
Ka Man Au, Mr.
Hon Tak Ringo Ng, Mr.
Yuin Chiek Lye and Ms.
Vicky Chan, each a member of the management of the Company (collectively, the "
Rollover Shareholders"), and (iii) Mr.
Zhicheng Shi and certain of his affiliated companies (collectively, the "
Mr. Shi Shareholders").
Pursuant to the Merger Agreement, (i) upon the terms and subject to the conditions set forth therein, at the effective time of the Transaction, Merger Sub will be merged with and into the Company with the Company surviving the merger as a wholly-owned subsidiary of Parent, and (ii) each ordinary share of the Company issued and outstanding immediately prior to the effective time of the Transaction will be cancelled in exchange for the right to receive
US$2.00 in cash without interest, except for the ordinary shares beneficially owned by (x) Mr. Yih, the Rollover Shareholders and the Mr.
Shi Shareholders, each of whom has entered into a rollover agreement with Parent under which such shareholder has agreed to the cancellation of its shares in the Company, the rollover of its options (if applicable) and the subscription for newly issued shares of Parent, and (y) holders of such ordinary shares who have validly exercised and not effectively withdrawn or lost their appraisal rights pursuant to Section 179 of the British Virgin Islands Business Companies Act, 2004, as amended. Currently, Mr. Yih, the Rollover Shareholders and the Mr.
Shi Shareholders collectively own approximately 18.2% of the Company's outstanding shares.
If the merger is completed, each stock option awarded under the Company's share incentive plans (other than those held by the Rollover Shareholders) shall, subject to consent from the owner of the option, be cancelled and converted into the right to receive cash in an amount equal to the excess of
US$2.00 over the exercise price of such option.
The Company's Board of Directors, acting upon the unanimous recommendation of the Special Committee formed by the Board of Directors, approved the Merger Agreement and the Transaction and resolved to recommend that the Company's shareholders vote to approve the Merger Agreement and the Transaction. The Special Committee, which is composed solely of directors unrelated to Parent, Merger Sub or any of the management members of the Company, negotiated the terms of the Merger Agreement with the assistance of its financial and legal advisors.