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Abax Global Capital May Buy Fushi Copperweld

Chinese bimetallic wire products maker Fushi Copperweld, Inc. is facilitating the due diligence investigation of the company by Fu and Abax to enable them to submit a firm offer.

Beijing -based Fushi Copperweld was providing an update regarding the "Going Private" proposal it received from its chairman and Co-CEO Li Fu and private equity firm Abax Global Capital (Hong Kong) Ltd. in early November 2010.

Earlier, the Fushi's Board formed a special committee of independent directors to consider the proposal.

The committee negotiated and executed confidentiality and standstill agreements with both Fu and Abax.

Currently, the committee is also considering other strategic alternatives, including other proposals and even continuing to remain an independent public company.

However, Fushi added that there can be no assurance that any deal will be struck with Fu and Abax or even others.

BofA Merrill Lynch is serving as independent financial adviser to the special committee and Gibson, Dunn & Crutcher LLP is serving as independent legal counsel.

Fu and Abax together have offered to take the company private for $11.50 per share in cash by offering to acquire all of the outstanding shares of Fushi not currently owned by Fu and his affiliates, who currently own about 29.2 percent of Fushi's common stock.

The offer price currently represents a 94% premium to the company's closing stock price of $5.93 on Wednesday, but represented only a 26% premium to its closing price of $9.10 on November 2, 2010, the day prior to when the "going private" proposal was made.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.