Chinese electric motors maker Harbin Electric, Inc. (HRBN: News ) agreed Monday to be taken private by its Chairman and CEO Tianfu Yang, and Abax Global Capital for $24.00 per share in cash. The acquiring conglomerate had reaffirmed their offer to take the company private on June 10. The deal has the approval of the company's board, which has recommended that its shareholders vote to approve the Merger Agreement.
The company expects the merger deal to currently close in the fourth quarter of this year. Following the completion of the merger, Harbin shares will no longer be listed on any public market. However, no assurance can be given that the merger will be completed as it is subject to approval by the company's shareholders.
"I want to thank the Special Committee for its extremely thorough work in reviewing our offer to take the Company private in order to ensure that the interests of all shareholders of the Company are fully protected," Yang said in a statement.
Yang and Abax have offered to acquire all of the outstanding shares of common stock of Harbin Electric not currently owned by them and their respective affiliates. They together own about 40.6 percent of Harbin Electric's outstanding shares.
Harbin, China-based Harbin Electric had earlier formed as special committee of independent directors to consider and evaluate this proposal from Yang and Abax. The Special Committee negotiated the terms of the deal with the assistance of its financial and legal advisers, Morgan Stanley & Co. Incorporated and Lazard Freres & Co. LLC, and Gibson Dunn & Crutcher LLC.
"I have full confidence that, with the help of its highly respected financial and legal advisors, the Special Committee has thoroughly reviewed and evaluated potential alternatives and has established the credibility of our offer, including the availability of debt financing from China Development Bank Corporation Hong Kong Branch and Abax," Yang added.
The merger will be funded by debt financing from China Development Bank Corp. Hong Kong Branch and affiliates of Abax, which has also issued an equity commitment letter committing certain funds and/or entities it manages or advises to provide additional equity financing. The merger will be executed by Tech Full Electric Co. Ltd., the acquisition vehicle formed for the deal.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.