China XD Plastics Goes Private; Shares Jump 12%

Binwei WangJun 16,2020,06:55

China XD Plastics Company Limited (Nasdaq: CXDC) announced Monday that it has entered into a definitive Agreement and Plan of Merger with Faith Dawn Limited and Faith Horizon Inc., sending its share up more than 12%.

The specialty chemical company said according to the agreement, Faith Dawn will acquire all of the outstanding common shares of the company for a cash consideration equal to $1.2 per share.

China XD Plastics reported the merger is currently expected to close during the third quarter of 2020, is subject to various closing conditions, including the adoption of the Merger Agreement by the company's stockholders. The board of directors, acting on the recommendation of a special committee of independent and disinterested directors, unanimously approved the Merger Agreement and the transactions contemplated by the Merger Agreement.

The company said Hogan Lovells is serving as U.S. legal counsel to the Special Committee, Duff & Phelps, LLC is serving as the financial advisor to the Special Committee.

Early of this month, the Harbin-based chemical company reported that its revenue reached $310.5 million in the fourth quarter, down 11% from one year ago. Net loss in the three months through December hit $65 million, or 97 cents per share, compared with a net income of $13 million, or 20 cents per share, in the same period of 2017.

Looking head, China XD Plastics didn't give any specific number of guidance but mentioned the over 30% decrease in the China auto industry during the first four months will impact the company through the supply chain.

Shares in China XD Plastics trading at $1.16 per share, up 12.02% on Monday.