This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Yongye Shares Fall After Buyout Fails

Stocks in this article: YONG

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.

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.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs