Acorn International enters merger agreement for going private transaction

Acorn International announced that it has entered into a definitive agreement and plan of merger with First Ostia Port, a Cayman Islands exempted company and its wholly owned subsidiary Second Actium Coin, a Cayman Islands exempted company, pursuant to which, the merger sub will merge with and into the company thereby becoming a wholly-owned subsidiary of the controlling shareholder. The company will be acquired in an all-cash transaction by the controlling shareholder. Pursuant to the terms of the merger agreement, each ordinary share, par value 1c per share, of the company, including shares represented by American Depositary Shares, each representing twenty shares, issued and outstanding immediately prior to the effective time, other than the excluded shares shall be cancelled in exchange for the right to receive $1.05 in cash per share without interest. As each ADS represents twenty shares, each ADS issued and outstanding immediately prior to the effective time, other than ADSs representing excluded shares, shall represent the right to receive $21.00 in cash without interest pursuant to the terms and conditions set forth in the merger agreement. The per share merger consideration represents a premium of 44.1% over the company's closing price of $14.57 per ADS as quoted on the New York Stock Exchange, or NYSE, on August 17, the last trading day prior to the day when the company received a non-binding "going private" proposal from the controlling shareholder. The merger consideration also represents an increase of approximately 38.0% over the $15.22 per ADS offered by the controlling shareholder in its revised going-private proposal on August 18 and a premium of approximately 39.4% over the company's closing price of $15.07 per ADS on October 9, the last trading day prior to issuance of this press release. The controlling shareholder intends to fund a substantial portion of the consideration for the merger in the form of debt funding from a third-party lender and has delivered to the company duly executed copies of the loan and security agreement. The board, acting upon the unanimous recommendation of a committee of independent directors established by the board, approved the merger agreement and the merger. The special committee negotiated the terms of the merger agreement with the assistance of its independent financial and legal advisors. The merger, which is currently expected to close during the last quarter of 2020, is subject to customary closing conditions, including the approval of the merger agreement by a requisite company vote 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. The company will call a shareholders meeting for the purpose of voting on the adoption of the merger agreement and the transactions contemplated by the merger agreement as soon as practicable. If the merger is completed, the company will continue its operations as a privately held company and will be wholly owned by the controlling shareholder and, as a result of the merger, the company will no longer be listed on the NYSE.