BlueCity Holdings Limited, a leading online LGBTQ platform, today announced that it has entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Multelements Limited (“Parent”), Diversefuture Limited, a wholly-owned Subsidiary of Parent (the “Merger Sub”), pursuant to which the Company will be acquired by a buyer group in an all-cash transaction (the “Merger”) implying an equity value of the Company of approximately US$60 million for all of the Company’s outstanding ordinary shares (each, a “Share”).
Pursuant to the Merger Agreement, at the effective time of the Merger, each Share issued and outstanding immediately prior to the Effective Time will be cancelled and cease to exist in exchange for the right to receive US$3.20 in cash without interest. Each outstanding American depositary share of the Company will be cancelled in exchange for the right to receive US$1.60 in cash without interest, except for certain Shares beneficially owned by Mr. Baoli Ma, chairman of the board of directors of the Company and chief executive officer, Aviator D, L.P. and Rainbow Rain Limited.
The Per ADS Merger Consideration represents a premium of 16.8% to the closing price of the Company’s ADSs on April 14, 2022, the last trading day prior to the Company’s announcement of its receipt of the revised “going-private” proposal dated April 18, 2022, and a premium of 19.21% to the volume-weighted average price of the ADSs during the 20 trading days prior to its receipt of the revised “going-private” proposal letter dated April 18, 2022.
The buyer group (the “Buyer Group”) comprises Mr. Baoli Ma, Metaclass Management ELP and the CDH Entities. The Buyer Group intends to fund the Merger with a combination of rollover equity and cash, and has delivered a copy of executed equity commitment letter to the Company.
The Board, acting upon the unanimous recommendation of a committee of independent directors established by the Board (the “Special Committee”), approved the Merger Agreement and the Merger and resolved to recommend that the Company’s shareholders vote to authorize and approve the Merger Agreement and the Merger. The Special Committee negotiated the terms of the Merger Agreement with the assistance of its financial and legal advisors.
The Merger is currently expected to close in the second half of 2022 and is subject to customary closing conditions including the approval of the Merger Agreement by an affirmative vote of holders of Shares representing at least two-thirds of the voting power of the Shares entitled to vote at a meeting of the Company’s shareholders. Shareholders affiliated with Mr. Baoli Ma and CDH entities have each agreed to vote all of the Shares and ADSs they beneficially own, which represent approximately 70% of the voting rights attached to the outstanding Shares as of the date of the Merger Agreement, in favor of the authorization and approval of the Merger Agreement and the Merger. If completed, the Merger will result in the Company becoming a privately held company, and its ADSs will no longer be listed on the Nasdaq Global Market.
The Company will prepare and file with the U.S. Securities and Exchange Commission a Schedule 13E-3 transaction statement, which will include a proxy statement of the Company. The Schedule 13E-3 will include a description of the Merger Agreement and contain other important information about the Merger, the Company and the other participants in the Merger.
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