Board of Directors Unanimously Recommends
Sinovac Shareholders NOT Tender
Shares for purchase pursuant to the Offer to Purchase
Sinovac Biotech Ltd. (NASDAQ: SVA) (“SINOVAC” or the “Company”),
a leading provider of biopharmaceutical products in China,
announced today that its Board of Directors (the “Board of
Directors”) unanimously determined that the partial tender offer
(the “Tender Offer”) by Alternative Liquidity Index LP
(“Alternative Liquidity”) to acquire up to 10,000,000 common shares
of Sinovac (the “Shares”) for $0.03 per share in cash (the “Offer
Price”) is NOT advisable and is NOT in the best
interests of the Company or its shareholders (“Shareholders”).
Accordingly, the Board of Directors recommends that the
Shareholders reject the Tender Offer and not tender their Shares
for purchase pursuant to the Offer to Purchase by Alternative
Liquidity.
The Company has filed a Schedule 14D-9 with the United States
Securities and Exchange Commission (the “SEC”) detailing the
reasons for its rejection of Alternative Liquidity’s Tender
Offer.
The Tender Offer was reviewed and considered by the Board of
Directors, none of whom are affiliated with Alternative Liquidity.
The Board of Directors took into account various factors in
evaluating the Tender Offer and in support of its recommendation
that the Shareholders reject the Tender Offer and not tender their
shares in the Tender Offer, including the following.
- The Company believes the implied valuation based on the Offer
Price is less than the value of the Company’s assets. The Board of
Directors believes that the Company has strong cash reserves and
short-term investments. As of June 30, 2023, cash and cash
equivalents and restricted cash totaled $1.6 billion. This amount
of cash and cash equivalents represents approximately $14.40 per
Share, based on the number of common shares and series B
convertible preferred shares outstanding as of June 30, 2023. In
addition, as of June 30, 2023, the Company’s short-term investments
totaled $9.4 billion. The Company also posted $14.0 million of net
income attributable to common shareholders, or $0.14 per basic and
$0.15 per diluted share, in the six-month period ended June 30,
2023.
- Alternative Liquidity acknowledges that it does not have any
accurate means for determining the present value of the Company’s
shares. Alternative Liquidity states that it “has not performed or
commissioned any appraisal, or engaged any independent financial
advisor or other third party to perform any valuation analysis or
provide any opinion respecting the value of the Shares.” The Board
of Directors believes this illustrates the lack of credibility of
Alternative Liquidity’s valuation methods and the inadequacy of the
Offer Price.
- Alternative Liquidity further states that “Shareholders who
tender their Shares will give up the opportunity to participate in
any future benefits from the ownership of Shares, including
potential future dividends by the Company from operations or
dispositions, and the Purchase Price per Share payable to a
tendering Shareholder by the Purchaser may be less than the total
amount which might otherwise be received by the Shareholder with
respect to the Shares from the Company.” In addition to the
aggregate total of $11.0 billion of cash and short-term
investments, the Company’s principal business objective remains
providing attractive risk-adjusted returns to its Shareholders
through the sale of a combination of the Company’s diversified
vaccines/biomedical products and potential long-term appreciation
in the value of the Company through its R&D efforts in
vaccines/biomedical products.
- Alternative Liquidity has made similar unsolicited partial
tender offers for the stock of other public companies, and it has
done so before for the stock of the Company using the same
strategy.
- Given the Offer Price, the Board of Directors believes that the
Tender Offer represents an opportunistic attempt by Alternative
Liquidity to make a profit by purchasing the Shares at a very low
price relative to their value, thereby depriving the shareholders
who tender Shares in the Tender Offer of the potential opportunity
to realize the full long-term value of their investment in the
Company. The Board of Directors’ belief in this regard is supported
by Alternative Liquidity’s own characterization of the Tender
Offer. Specifically, the Board of Directors notes the following
statement in the Tender Offer Statement on Schedule TO: “The
Purchaser is making the Offer for investment purposes and with the
intention of making a profit from the ownership of the Shares.”
Alternative Liquidity made a partial tender offer of Shares with
the same Offer Price in August 2023, and holds 93,507 Shares.
- In addition, the Board of Directors notes that the Tender Offer
can be amended for various reasons. Accordingly, the Board of
Directors notes that there can be no assurance that the Tender
Offer would be completed as soon as Alternative Liquidity implies,
or with the same terms and conditions, including without
limitation, the Offer Price. Finally, Shareholders’ tenders of
Shares pursuant to the Tender Offer are irrevocable and may only be
withdrawn prior to the Expiration Date, currently February 21,
2024, by following the strict procedure described in the Offer to
Purchase.
In view of the number of reasons and complexity of these
matters, the Board of Directors did not find it practicable to, nor
did it attempt to, quantify, rank or otherwise assign relative
weight to the specific reasons considered.
In the course of its deliberations, the Board of Directors also
considered the following material risks and other countervailing
factors related to the Tender Offer that previously had been
identified and discussed by the Company’s management and its Board
of Directors:
- Trading of the Company’s common shares on NASDAQ has been
halted since February 22, 2019 in order to facilitate the orderly
distribution of the exchange shares pursuant to the rights
agreement (the “Rights Agreement”), and in light of the ongoing
litigation concerning the Rights Agreement, there can be no
assurance when or if this halt will be lifted;
- The ongoing litigation concerning the exchange of shares and
the Rights Agreement could have a material adverse effect on the
results of the Company’s operations and it’s financial condition;
and
- The Company has not been able to hold an annual meeting of
shareholders since February 2018 due to the ongoing litigation
concerning the exchange of shares and the Rights Agreement, and may
not be able to hold an annual meeting of shareholders before the
final determination of such litigation.
The foregoing discussion of the information and factors
considered by the Board of Directors in reaching its conclusions
and recommendations is not exhaustive, but rather includes the
material reasons and factors considered by the Board of Directors.
In light of the wide variety of reasons and factors considered
above, the Board of Directors has determined that the Tender Offer
is not advisable and is not in the best interests of the Company or
the Shareholders.
Additional Information
The full basis for the Board’s unanimous recommendation is set
forth in Sinovac’ Schedule 14D-9 filed on January 18, 2024 with the
SEC and is available on the SEC’s website at www.sec.gov. Copies of
the Schedule 14D-9 may also be obtained on the Company’s website at
www.sinovac.com or by contacting Helen Yang at +86-10-8279 9720 or
via email at ir@sinovac.com.
About SINOVAC
Sinovac Biotech Ltd. (SINOVAC) is a China-based
biopharmaceutical company that focuses on the R&D,
manufacturing, and commercialization of biomedical products that
protect against human infectious diseases.
SINOVAC’s product portfolio includes vaccines against COVID-19,
enterovirus 71 (EV71) infected hand-foot-mouth disease (HFMD),
hepatitis A, varicella, influenza, poliomyelitis, pneumococcal
disease, mumps, etc.
The COVID-19 vaccine, CoronaVac®, has been approved for use in
more than 60 countries and regions worldwide. The hepatitis A
vaccine, Healive®, passed WHO prequalification requirements in
2017. The EV71 vaccine, Inlive®, is an innovative vaccine under
"Category 1 Preventative Biological Products" and commercialized in
China in 2016. In 2022, SINOVAC’s Sabin-strain inactivated polio
vaccine (sIPV) and varicella vaccine were prequalified by the
WHO.
SINOVAC was the first company to be granted approval for its
H1N1 influenza vaccine Panflu.1®, which has supplied the Chinese
government's vaccination campaign and stockpiling program. The
Company is also the only supplier of the H5N1 pandemic influenza
vaccine, Panflu®, to the Chinese government stockpiling
program.
SINOVAC continually dedicates itself to pipeline development
including but not limited to new technology, new vaccines as well
as other biomedical products. We will constantly explore global
opportunities of strategic expansion.
For more information, please visit the Company’s website at
www.sinovac.com.
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of the federal securities laws that involve risks and
uncertainties, many of which are beyond the Company’s control. The
Company’s actual results could differ materially and adversely from
those anticipated in such forward-looking statements as a result of
certain factors, including those set forth in this communication.
Forward-looking statements are statements other than historical
facts that relate to matters such as our industry, business
strategy, goals and expectations concerning our market position,
future operations, margins, profitability, capital expenditures,
financial condition, liquidity, capital resources, cash flows,
results of operations and other financial and operating
information. When used in this communication, the words “may,”
“might,” “will,” “would,” “future,” “plan,” “believe,” or the
negative of these words, variations thereof or similar expressions
are intended to identify forward-looking statements, although not
all forward-looking statements contain such identifying words. For
example, our forward-looking statements include statements
regarding Alternative Liquidity’s Tender Offer. Factors that could
cause or contribute to such differences include, but are not
limited to risks inherent with tender offers; the occurrence of any
event, change or other circumstances that could make the Tender
Offer impracticable; risks related to disruption of management time
from ongoing business operations due to the Tender Offer;
unexpected costs, charges or expenses resulting from the Tender
Offer; and litigation or claims relating to the Tender Offer.
Factors and risks that could cause actual results to differ
materially from expectations are disclosed from time to time in
greater detail in the Company’s filings with the SEC including, but
not limited to, the Company’s Annual Report on Form 20-F filed with
the SEC on May 1, 2023, its press release in relation to its
unaudited first half of 2023 financial results on Form 6-K filed
with the SEC on August 15, 2023 and the Company’s future filings.
The Company cautions that you should not place undue reliance on
any of its forward-looking statements. Any forward-looking
statement made by the Company in this communication speaks only as
of the date on which it is made. The Company undertakes no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by applicable securities
laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20240118372574/en/
Sinovac Biotech Ltd. Helen Yang Tel: +86-10-8279 9720
Email: ir@sinovac.com
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