Trina Solar Ltd. has entered into a definitive agreement for a going-private transaction and plan of merger with Fortune Solar Holdings Ltd. and Red Viburnum Co. Ltd. (a wholly owned subsidiary of Fortune Solar) in which the company will be acquired by an investor consortium.
Trina Solar says the all-cash transaction implies an approximately $1.1 billion equity value of the company.
Under the terms of the merger agreement, each Trina Solar ordinary share issued and outstanding (immediately prior to the effective time of the merger) will be canceled in exchange for the right to receive $0.232 in cash without interest. In addition, each American depositary share (ADS) will be canceled in exchange for the right to receive $11.60 in cash without interest.
The investor consortium comprises, among others, Jifan Gao, chairman and CEO of Trina Solar; Shanghai Xingsheng Equity Investment & Management Co. Ltd.; Shanghai Xingjing Investment Management Co. Ltd.; Great Zhongou Asset Management (Shanghai) Co. Ltd.; Liuan Xinshi Asset Management Co. Ltd.; and/or their respective affiliates.
The merger consideration represents a premium of 21.5% to the closing price of the company’s ADS on Dec. 11, 2015, the last trading day prior to the company’s announcement of its receipt of a going-private proposal; a premium of 20.2% to the average closing price of the company’s ADS during the 90 trading days prior to its receipt of a going-private proposal; and a premium of 40.6% to the closing price of the company’s ADS on July 29, the last trading day prior to the this announcement.
Trina Solar’s board of directors, acting upon the unanimous recommendation of a committee of independent and disinterested directors established by the board, approved the agreement, which is currently expected to close during the first quarter of 2017 (subject to customary closing conditions).
Citigroup Global Markets Inc. and Kirkland & Ellis are serving as financial advisor and U.S. legal counsel, respectively, for the committee. Duff & Phelps LLC and Skadden, Arps, Slate, Meagher & Flom LLP are serving as financial advisor and U.S. legal counsel, respectively, for the investor consortium.
The deal, if completed, will make Trina Solar a privately owned company; in addition, its ADS will no longer be listed on the New York Stock Exchange.