This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Yongye Shares Fall After Buyout Fails

NEW YORK (The Deal) -- Yongye International (YONG) said Wednesday the $340 million buyout by chairman and CEO Zishen Wum and the Asian private equity arm of Morgan Stanley did not get the required vote of nonaffiliated shareholders at an adjourned special meeting.

The Beijing-based, Nevada-incorporated company is one of the latest buybacks of Chinese entities floated in the U.S., most of which have closed even as they have traded at wider spreads than other deals in the risk arbitrage market. The Yongye special meeting was adjourned Feb. 19 to garner support from the nonaffiliated shareholders, of which the agreement required a simple majority beyond the 37.8% that was committed to the deal.

Institutional Shareholder Services Inc., Glass Lewis & Co. LLC and Egan-Jones Proxy Services each recommended shareholders approve the buyout proposal of $6.69 per share.

Yongye is a manufacturer and distributor of crop nutrients in the People's Republic of China.

Must Read: Minerals Technologies Lifts Amcol Bid to $1.74B

The buyout had some opposition from hedge funds but also might have suffered from turnout of the retail shareholder base. Glenhill Advisors LLC, with 4% of Yongye, filed a 13D in October in opposition to the buyout valuation but amended its position in January, stating it might vote for the deal. Pine River Capital Management LP, with a 4% stake, and Pentwater Capital Management LP, with 8%, each followed into the buyout.

The company has historically had a large retail shareholder base, which may have hampered the vote. The final numbers have not been released but are expected to be filed with Securities and Exchange Commission by next week.

Glenhill attempted without success to produce a competing offer for Yongye but threw in the towel on the effort in January.

According to one arbitrage source, there was a banter over the deal price leading into the vote on March 5, but the two sides could not come to an agreement.

Yongye representatives, as well as the funds holding the largest stakes, were not available for comment.

The deal had been bumped 9 cents, or 1.4%, from the October 2012 approach of $6.60 per share, and Yongye said in its solicitation materials that the sweetener was difficult to get out of the buyer group. With Glenhill's attestation that a competing bid could not be expected, the outcome looks uncertain at best.

The current bid is off the table. Apparently some of the retail vote that the buyers adjourned the meeting in order to court came in against the deal, and there was no latitude to alter the vote threshold.

Yongye opened Thursday at $5.98 per share, down 9% from the previous day's close.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
YONG $7.05 0.14%
AAPL $117.96 -0.06%
FB $105.10 -0.29%
GOOG $749.44 0.17%
TSLA $231.24 0.70%


Chart of I:DJI
DOW 17,787.97 -25.42 -0.14%
S&P 500 2,088.72 -0.15 -0.01%
NASDAQ 5,121.3950 +5.2520 0.10%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs