Renren forms special committee and receives preliminary non-binding proposal
Renren has formed a special committee to review the terms of a proposed spin-off. The company intends to spin off a newly formed subsidiary that will hold the company's social video platform woxiu.com and most of the company's investments in minority stakes in privately held companies. The spin-off is being undertaken to minimize the risk that the company could be deemed to be an "investment company". The company plans to distribute rights, exercisable for shares in SpinCo, to the company's shareholders on a pro rata basis. The company has received a preliminary non-binding proposal to purchase any shares of SpinCo that are not distributed in the proposed spin-off. The letter was from CEO Joseph Chen, COO James Jian Liu, and SoftBank Group Capital Limited, an affiliate of SB Pan Pacific Corporation. Chen and SB Pan Pacific are the company's two largest shareholders. The preliminary non-binding proposal would value SpinCo at $500M, net of debt.