SORL Auto Parts, a manufacturer and distributor of automotive brake systems and other key safety-related auto parts in China, announced that its board of directors has received a non-binding preliminary proposal letter, dated April 25, 2019, from Xiaoping Zhang, its chairman and CEO (“Chairman Zhang”), Shuping Chi and Xiaofeng Zhang, directors of the company, and Ruili Group Co., Ltd. (together, the “Consortium”) to acquire all of the outstanding shares of common stock of the company not already owned by the Consortium for US$4.26 per share of common stock in cash. Chi is the wife of Chairman Zhang and Xiaofeng Zhang is the brother of Chairman Zhang.
The $4.26 per share price of the proposal represents a 13.9% premium over the company’s last closing price on April 24, 2019, a premium of approximately 35.64% to its average closing price during the last 30 trading days, and a premium of approximately 36.93% to its average closing price during the last 60 trading days.
The members of the Consortium currently own approximately 58.9% of the issued and outstanding shares of common stock of the company. The Consortium has engaged O’Melveny & Myers LLP as its legal adviser and Huatai United Securities Co., Ltd. as its financial adviser for the proposed transaction. The Consortium intends to fund the proposed transaction with cash on hand.
The board intends to form a special committee consisting of independent directors to consider the proposal, and expects that the special committee will retain independent advisers, including independent financial and legal advisers, to assist it in this process.
