BTG Hotels Group announced it will set up special-purpose companies overseas to conduct its planned privatization of the Homeinns Hotel Group.
BTG Hotels will first set up a first tier special-purpose company, the BTG Hotels Group (Hong Kong) Holding Co. Ltd., in Hong Kong with HKD$1 in capital and then use BTG Hotels (Hong Kong) to register a second tier special-purpose company in the Cayman Islands, BTG Hotels Group (Cayman) Holding Co. Ltd., with US$50,000 in registered capital.
BTG Hotels said it is common practice for companies to set up two-tier offshore special-purpose companies for privatization of US acquisitions.
The BTG Hotels board of directors sent a non-binding privatization offer to Homeinns Hotel Group on June 11 to purchase all of Homeinns’s remaining American Depositary Shares for US$32.81 per share.
BTG Hotels will first make a cash-based acquisition of Homeinns’s remaining shares and then start an extended privatization process of the latter.
Next, BTG Hotels will sign exchange agreements with other members of its buyer group and raise funds to individually acquire the 35% of Homeinns’s acquired shares held by Poly Victory, Ctrip and private individuals Neil Shen, James Liang (Ctrip co-founders) and Homeinns’s CEO David Sun.
BTG Hotels will give private exchangeable corporate bonds to Neil Shen and the other individuals who will then make a share swap for 8% of BTG Hotels’s equity.(Translation by David)
