China Ming Yang Power Group Prepares to Go Private

China Ming Yang Wind Power Group Ltd. (NYSE: MY) made waves early in Wednesday’s trading session on a merger agreement that will take the company private. The board of directors unanimously approved this decision and in fact it has been in the works since last October.

The company will be acquired by a consortium of investors, including Chuanwei Zhang, the chairman and CEO of Ming Yang, in an all-cash transaction which values the equity at roughly $408 million. Effectively each American depositary share (ADS) is being valued at $2.51 in this takeover.

The merger consideration represents a premium of 13.1% to the closing price of the company’s ADSs on October 30, 2015, the last trading day prior to the announcement of a “going-private” proposal. This is also a premium of 19.3% to the volume-weighted average closing price of the ADSs during the 30 trading days prior to its receipt of a “going-private” proposal.
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According to the release:

The merger, which is currently expected to close during the first half of 2016, 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 present and voting in person or by proxy at a meeting of the Company’s shareholders which will be convened to consider the approval of the merger agreement and the merger. Mr. Chuanwei Zhang and certain rollover shareholders have agreed to vote all of the Shares they beneficially own, which represent approximately 44% 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 New York Stock Exchange.

Shares of Ming Yang were last seen trading up 12.7% at $2.31, with a consensus analyst price target of $0.90 and a 52-week trading range of $1.86 to $3.82.