SHANGHAI, June 30, 2018 /PRNewswire/ -- the consortium (the "Ocean Link Consortium") formed between Ocean Imagination L.P., an entity controlled by Ocean Link Partners Limited, a private equity firm dedicated to investing in travel-related industries in China ("Ocean Link") and Ctrip Investment Holding Limited, a subsidiary of Ctrip.com International Ltd. (NASDAQ: CTRP), leading provider of accommodation reservation, transportation ticketing, package tour and corporate travel management and other travel-related services in China ("Ctrip"), today released a letter dated June 29, 2018 to the board of directors of eHi Car Services Limited (NYSE: EHIC) ("eHi") in which the Ocean Link Consortium submitted a revised non-binding proposal (the "Revised Proposal") to acquire all outstanding common shares of eHi (the "Shares") not currently owned by members of the Ocean Link Consortium in a going-private transaction.
Under the terms of the Revised Proposal, eHi shareholders other than those in the Ocean Link Consortium will receive US$7.75 in cash for each Share they hold or US$15.50 in cash for each American depositary share, each representing two Shares (an "ADS") they hold. The price represents a premium of approximately 18.7% over the closing trading price of the Company's ADS on June 28, 2018, the last trading day prior to submission of this Revised Proposal, and is $2 per ADS or 14.8% higher than the price offered in the agreement and plan of merger entered into between eHi and the buyer consortium led by Mr. Ray Ruiping Zhang, chief executive officer of eHi on April 6, 2018. The price of the Chairman Consortium is believed to have significantly undervalued the Company, which is echoed by a letter by Burford Capital Limited ("Burford"), who is an existing beneficiary owner of the Company. Burford expressed its "disappointment with [the Board]'s decision not to pursue a competitive and fair sale process", and complained "the Board is doing shareholders a grave disservice by ignoring Ocean Link's proposal".
Collectively, the Ocean Link Consortium holds 4,838,764 Class A common shares and 23,767,404 Class B common shares, representing an existing stake carrying 33.2% voting rights. The Ocean Link Consortium is confident that sufficient voting power has been gathered to veto any take-private transaction that is not in the best interest of eHi's shareholders.
The Ocean Link Consortium encourages other existing shareholders, including management shareholders, to join the Ocean Link Consortium or to support its higher price offer.
The full text of the Ocean Link Consortium's letter to eHi dated June 29, 2018 follows.
June 29, 2018
The Board of Directors
eHi Car Services Limited
Unit 12/F, Building No. 5
Guosheng Center, 388 Daduhe Road
Shanghai, 200062
People's Republic of China
Dear Board Members of eHi,
On April 2, 2018, Ocean Link Partners Limited submitted a non-binding proposal to the Board of Directors (the "Board") of eHi Car Services Limited (the "Company") to acquire all outstanding common shares (the "Shares") of the Company in a going-private transaction at US$14.50 per American depositary share of the Company ("ADS", each representing two Shares) in cash. On behalf of our affiliates and consortium members (together, the "Ocean Link Consortium"), we hereby inform you that we increase our offer price to US$15.50 per ADS in cash. Our increased offer price represents a 18.7% premium to the closing trading price of the Company's ADS on June 28, 2018. Our increased offer price is also US$2.00 per ADS or 14.8% higher than the Chairman Consortium's offer price, which undervalued the Company.
We would also note that we provided to the special committee of the Board a highly confident letter from China Merchants Bank on May 24, 2018 in relation to US$800 million debt financing to refinance the Company's outstanding senior notes. In comparison, the financing sources of the Chairman Consortium fail to provide sufficient commitment to refinance the full amount of such existing senior notes and the closing of the Chairman Consortium's take-private transaction depends on the success of a consent solicitation process in respect of the Company's existing senior notes, which adds significant uncertainty to the ability of the Chairman Consortium to close the take-private transaction.
Despite our higher offer on April 2, 2018, the Board, consisting of members of the Chairman Consortium, disregarded the Board's fiduciary duties and approved a Merger Agreement with the Chairman Consortium. Neither the Board nor the special committee has so far provided information access or substantive feedback to the Ocean Link Consortium's various follow-up communications with the Board and the special committee. The Ocean Link Consortium clearly stated its willingness to complete customary due diligence in a timely manner in the first proposal to the Board on April 2nd, and repeatedly requested information access in the letters to the Special Committee dated May 16th, May 24th and June 3rd. By now, twelve weeks have passed since we submitted our first proposal. Had the special committee given adequate consideration to the Ocean Link Proposal, and provided the customary information access, the due diligence on the Company and negotiations of the merger document with the Ocean Link Consortium would have already been completed.
With this revised offer price, sufficient financing capability, and an existing stake carrying 33.2% voting rights, we strongly urge the Board and the special committee to enter into constructive negotiation with us regarding our offer, and finalize the draft merger agreement we provided to the special committee of the Board on June 3, 2018 which contains terms more favorable to the Company than the merger agreement that the Company entered into with the Chairman Consortium.
Ocean Link Consortium is determined to complete the take-private process based on the offer set out above. We also welcome other existing shareholders, including management shareholders, to join the Ocean Link Consortium or to support our offer.
Sincerely,
Ocean Link Partners Limited
By: /s/ Tony Tianyi Jiang
Name: Tony Tianyi Jiang
Title: Director
Ctrip Investment Holding Ltd.
By: /s/ Frank Kun Geng
Name: Frank Kun Geng
Title: Authorized Signatory
For more inquiries, please contact info@oceanlp.com.
