BEIJING, Jan. 24, 2020
/PRNewswire/ -- Changyou.com Limited ("Changyou" or the "Company")
(NASDAQ: CYOU), a leading online game developer and operator in
China, today announced that it has
entered into a definitive Agreement and Plan of Merger (the "Merger
Agreement") with Sohu.com (Game) Limited ("Sohu Game"), an
indirectly wholly-owned subsidiary of Sohu.com Limited (NASDAQ:
SOHU, "Sohu"), and Changyou Merger Co. Limited ("Merger Co.," and
together with Sohu and Sohu Game, the "Sohu Group"), a wholly-owned
subsidiary of Sohu Game, pursuant to which the Company will be
acquired by the Sohu Group in an all-cash transaction implying an
equity value of the Company of approximately $579.0 million (the "Merger").
Pursuant to the terms of the Merger Agreement, at the effective
time of the Merger (the "Effective Time"), each Class A ordinary share of the Company
(each, a "Class A Ordinary Share") issued and outstanding
immediately prior to the Effective Time, other than the Excluded
Shares (as defined in the Merger Agreement), will be cancelled and
cease to exist, in exchange for the right to receive $5.40 in cash without interest, and each
outstanding American depositary share of the Company (each, an
"ADS," representing two Class A Ordinary Shares), other than the
ADSs representing the Excluded Shares, will be cancelled in
exchange for the right to receive $10.80 in cash without interest (the "Merger
Consideration").
At the Effective Time, each (i) outstanding and fully-vested
option (each, a "Vested Option") to purchase Class A Ordinary
Shares under the Company's share incentive plans will be cancelled,
and each holder of a Vested Option will have the right to receive
an amount in cash determined by multiplying (x) the excess, if any,
of $5.40 over the applicable exercise
price of such Vested Option by (y) the number of Class A
Ordinary Shares underlying such Vested Option; and (ii) each
outstanding but unvested option (each, an "Unvested Option") to
purchase Class A Ordinary Shares under the Company's share
incentive plans will remain outstanding and continue to vest
following the Effective Time in accordance with the applicable
Company share incentive plan and award agreement governing such
Unvested Option in effect immediately prior to the Effective
Time.
The Merger Consideration represents a premium of 82.4% to
the closing price of the Company's ADSs on September 6, 2019, the last trading day prior to
the Company's announcement of its receipt of the "going-private"
proposal, and a premium of 70.1% to the average closing price of
the Company's ADSs during the 30 trading days prior to its receipt
of the "going-private" proposal.
The Sohu Group intends to fund the Merger primarily with debt
financing. The Sohu Group has delivered a copy of an executed debt
commitment letter to the Company pursuant to which Industrial and
Commercial Bank of China Limited, Tokyo Branch will provide, subject to the
terms and conditions set forth therein, an amount sufficient to
fund in full the consummation of Merger and the other transactions
related thereto.
The Company's board of directors (the "Board"), acting upon the
unanimous recommendation of a committee of independent and
disinterested directors established by the Board (the "Special
Committee"), approved the Merger Agreement and the Merger. The
Special Committee negotiated the terms of the Merger Agreement with
the assistance of its financial and legal advisors. Because the
Sohu Group owns over 90% of the voting power represented by all
issued and outstanding shares of the Company, the Merger will be in
the form of a short-form merger of Merger Co. with and into
Changyou in accordance with section 233(7) of the Companies Law of
the Cayman Islands, with Changyou
being the company surviving the Merger. Shareholder approval of the
Merger Agreement and the Merger is not required.
The Merger is currently expected to close in the second quarter
of 2020. If completed, the Merger will result in the Company
becoming a privately‑owned company wholly owned directly and
indirectly by Sohu, its ADSs will no longer be listed on the Nasdaq
Global Select Market, and the ADS program will be terminated.
Houlihan Lokey (China) Limited is serving as financial advisor
to the Special Committee; Skadden, Arps, Slate, Meagher & Flom
LLP is serving as U.S. legal counsel to the Special Committee.
China Renaissance through its subsidiary CRP-Fanya Investment
Consultants (Beijing) Limited is
serving as financial advisor to the Sohu Group; Goulston &
Storrs PC is serving as U.S. legal counsel to the Sohu Group; and
Han Kun Law Offices is serving as PRC legal counsel to the Sohu
Group.
The validity of the Merger and certain other legal matters with
respect to the Cayman Islands law
are passed upon and advised by Conyers
Dill & Pearman.
Additional Information About the Merger
The Company will furnish to the U.S. Securities and Exchange
Commission (the "SEC") a current report on Form 6-K regarding the
Merger, which will include as an exhibit thereto the Merger
Agreement. All parties desiring details regarding the Merger are
urged to review these documents, which will be available at the
SEC's website (http://www.sec.gov).
In connection with the Merger, the Company will prepare and mail
a Schedule 13E-3 Transaction Statement (the "Schedule 13E-3"). The
Schedule 13E-3 will be filed with the SEC. INVESTORS AND
SHAREHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE
SCHEDULE 13E-3 AND OTHER MATERIALS FILED WITH THE SEC WHEN THEY
BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE COMPANY, THE MERGER, AND RELATED MATTERS. In addition to
receiving the Schedule 13E-3 by mail, shareholders also will be
able to obtain these documents, as well as other filings containing
information about the Company, the merger, and related matters,
without charge from the SEC's website (http://www.sec.gov) or at
the SEC's public reference room at 100 F Street, NE, Room 1580,
Washington, D.C. 20549.
Safe Harbor Statement
This announcement includes statements that constitute
"forward-looking statements" within the meaning of Section 21E of
the Securities Exchange Act of 1934. Actual results could differ
materially from those referred to in any such forward-looking
statements because of risks and
uncertainties, including the possibility that the Merger will not
occur as planned if events arise that result in the termination of
the Merger Agreement, if the expected financing for the Merger is
not available for any reason, or if one or more of the various
closing conditions to the Merger are not satisfied or waived, and
other risks and uncertainties regarding the Merger Agreement and
the Merger that will be discussed in the Schedule 13E-3 to be filed
with the SEC.
About Changyou
Changyou.com Limited (NASDAQ: CYOU) is a leading developer and
operator of online games in China
with a diverse portfolio of popular online games, such as
Tian Long Ba Bu ("TLBB"), one of the
most popular PC games in China, as
well as a number of mobile games. Changyou also owns and operates
the 17173.com Website, a leading game information portal in
China. Changyou began operations
as a business unit within Sohu.com Limited (NASDAQ: SOHU) in 2003,
and was carved out as a separate, stand-alone company in
December 2007. It completed an
initial public offering on April 7, 2009. Changyou has an
advanced technology platform that includes advanced 2.5D and 3D
graphics engines, a uniform game development platform, effective
anti-cheating and anti-hacking technologies, proprietary
cross-networking technology and advanced data protection
technology. For more information, please visit
http://ir.changyou.com/.
For investor and media inquiries, please contact:
In China:
Mr. Yujia Zhao
Investor Relations
Tel: +86 (10) 6192-0800
E-mail: ir@cyou-inc.com
In the United
States:
Ms. Linda Bergkamp
Christensen
Phone: +1 (480) 614-3004
E-mail: lbergkamp@ChristensenIR.com
View original content to download
multimedia:http://www.prnewswire.com/news-releases/changyoucom-enters-into-a-definitive-agreement-for-going-private-transaction-300992707.html
SOURCE Changyou.com Limited