Yongye International — Merger or Acquisition (January 2014)
21 slides from Yongye International's merger presentation, Jan 22, 2014
Slide 1: Investor Presentation January 2014
Investor Presentation January 201 4
Slide 2: Transaction Overview
Transaction Overview 2 • On September 23, 2013, Yongye International, Inc. (the ‘‘Company’’) entered into an agreement and plan of merger (the ‘‘ M erg er Agreement” ) with Full Alliance International Limited (‘‘Holdco’’), Yongye International Limited (‘‘Parent’’), and Yongye International Merger Su
Slide 3: Process Led by Experienced and Independent Special Committee
Proce s s L ed by E xperienced and I ndependent S pecial C ommittee The Special Committee Consists Of Independent Directors With Deep Experience And Functional Expertise, A nd Is A dvised By Leading Independent Legal And Financial Advisors 3 Mr. Sean Shao Chairman of the Special Committee Independen
Slide 4: Rigorous Process
Rigorous P rocess 4 • The special committee was formed on August 29 , 2012 and composed solely of independent directors unrelated to management of the Company or the Buyer Group. The special committee has exclusive control over all matters in connection with the Merger and any other strategic altern
Slide 5: US$6.69 per Share in Cash: A Compelling Offer with Significant Premium
US$6.69 per Share in Cash: A Compelling Offer with Significant Premium 5 • All cash transaction provides immediate liquidity • US$6.69 per share represents a substantial premium to pre - announcement stock price – Transaction was announced Oct 15 , 2012 with initial offer price of US$6.60 per share
Slide 6: Independent Financial Advisor Confirms The Fairness of the Merger
Independent Financial Advisor Confirms The Fairness of the Merger 6 5.18 4.11 9.51 9.12 10.60 4.73 7.94 7.76 11.67 6.74 6.26 5.67 6.27 2.36 4.50 5.00 0 4 8 12 Selected Companies Analysis 0.80x–1.10x LTM 6/30/2013 Revenue Selected Companies Analysis 0.70x–1.00x NFY 12/31/2013 Revenue Selected Compani
Slide 7: Share Price Is Supported By The Merger Offer
0 2 4 6 8 10 12 14 21-Apr-08 11-Feb-09 4-Dec-09 28-Sep-10 21-Jul-11 14-May-12 6-Mar-13 31-Dec-13 - 2.00 4.00 6.00 8.00 10.00 12.00 14.00 Volume Price Share Price & Volume History Price (US$) Per Share Merger Consideration US$6.69 3 - Sep - 09 Yongye was up - listed to NASDAQ exchange at US$ 7.50 per
Slide 8: Robust Market Check and Go-shop Process
Robust Market Check and Go - shop Process 8 • The special committee conducted a 35 - day market check between December 5, 2012 and January 9, 2013 – 60 parties were contacted: 29 strategic parties and 31 financial sponsors – 3 financial sponsors expressed interest in receiving additional information
Slide 9: Limited Execution Risk
Limited Execution Risk 9 • Committed financing – Parent entered into a foreign exchange facility contract, dated as of September 23, 2013, with China Development Bank Corpora tio n for debt financing in an aggregate amount of US$214 million to fund the Merger – Lead Rich deposited with an escrow age
Slide 10: Risk of Stock Price Decline If The Merger Is Not Completed
Risk of Stock Price Decline If The Merger Is Not Completed 10 • Challenges to Yongye stock trading – The Chinese companies listing in the U.S. market through reverse mergers were adversely affected in general in terms of liqui dit y and trading price by the bulletin issued and related enforcement ac
Slide 11: Outperformance Due to The Merger
11 Outperformance Due to The Merger Since May 2011 Yong’s S hare Price R ose By 21% As S upported By T his Merger , While The Bloomberg C HINA RTO Index Dropped 28% 0.00 2.00 4.00 6.00 8.00 May-11 Dec-11 Aug-12 Apr-13 Dec-13 0 1,000 2,000 3,000 4,000 Volume Garden China RTO Garden Price Performance
Slide 12: Underperformance of Previous Shareholder-rejected Transactions
Underperformance of Previous Shareholder - rejected Transactions 12 Source: FactSet, ISS Note 1. Includes transactions 2005 – 2012, U.S. target only Selected Target Stock Price Performance For Shareholder - rejected Transactions (2005 – 2012) Average 1 - year And 2 - year Declines of 17% And 54%, Re
Slide 13: Summary
Summary 13 • The transaction was managed by an independent special committee , assisted by experienced and independent legal and financial advisors • Robust process to solicit alternative proposals conducted with no other potential alternative proposals received • Compelling o ffer with s ignificant
Slide 14: Appendix: Responses to Glenhill's 13D Filing
14 Appendix : Responses to Glenhill’s 13D Filing
Slide 15: Responses to Glenhill's 13D Filing: Special Committee Process
Responses to Glenhill’s 13D Filing 15 1. Concerns on s pecial committee’s process A: The special committee ran a robust process to protect the shareholders’ interest and maximize the value from this transaction: – Composed solely of independent directors unrelated to management of the Company or the
Slide 16: Responses to Glenhill's 13D Filing: Comparable Companies
Responses to Glenhill’s 13D Filing 16 2. Lack of comparable companies in non - U.S. public or private markets A: A wide range of public and private comparable companies ha d been selected by the special committee’s independent financial advisor Houlihan Lokey : – There were 24 selected public compar
Slide 17: Responses to Glenhill's 13D Filing: Price Increase
Responses to Glenhill’s 13D Filing 17 4. 1.4% price increase is inadequate A: Among the 51 completed and announced go - private transactions of US - listed Chinese companies, only 18 increased their offer price. Although the initial offer price was already within the valuation range based on Houliha
Slide 18: Responses to Glenhill's 13D Filing: Performance Targets
Responses to Glenhill’s 13D Filing 18 6 . High performance targets set in 2011 for MSPEA’s investment are attainable and cannot justify the offer price A: The performance target s set forth in MSPEA’s investment agreement were established in mid 2011. Since then, the market environment and business
Slide 19: Responses to Glenhill's 13D Filing: Historical Stock Price
Responses to Glenhill’s 13D Filing 19 8 . Yongye’s stock once traded as high as US$12 back in 2009 A: Negative US investor sentiment towards Chinese RTO companies has impeded institutional (non - retail) ownership since mid 2011 when SEC issued the bulletin regarding the risks associated with the Ch
Slide 20: Forward-Looking Statement
Forward - Looking Statement 20 • This investor presentation contains certain statements that may include "forward - looking statements." All statements other than statements of historical fact included herein are "forward - looking statements." These forward - looking statements are often ident ifie
Slide 21: Additional Information and Where to Find it
Additional Information and Where to Find it 21 • In connection with the Merger, the Company filed a definitive proxy statement with the Securities and Exchange Commission (th e " SEC") on January 9, 2014, and has mailed the definitive proxy statement to its stockholders. In addition, certain partici
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