On September 13, 2005, Great Wall Acquisition (GWAQ.OB) announced that it intends to initiate a tender offer for all of the shares of ChinaCast Communication Holdings Limited, a “leading provider of e-learning services and content (that) address(es) the needs of K-12 schools, universities, government agencies and corporate enterprises in the People's Republic of China.”
This is a potentially complicated deal, particularly given the fact that ChinaCast is already public. The shares of ChinaCast have been listed on the Main Board of the Singapore Exchange Securities Trading Limited since May 2004.
According to Great Wall, ChinaCast shareholders holding a majority interest (51.2%) in the company “have irrevocably agreed to accept a pre-conditional voluntary tender offer (the "Offer") made by Great Wall.” These shareholders will receive 10,614,936 shares of Great Wall stock. The minority shareholders will be given the option of receiving either cash or Great Wall stock in exchange for their shares. If all of the ChinaCast shareholders tender their shares, Great Wall will issue 20,752,301 common shares, equal to a 79.0% interest in the merged company.
Great Wall completed its IPO on March 19, 2004, selling 4,515,975 units at $6.00 per unit and raising gross proceeds of $27,095,850. The original insiders own one million shares.
Great Wall expects the transaction to close during the first quarter of 2006.
The common shares of Great Wall were trading at $5.30 prior to the announcement of the transaction. Today, they closed at $5.18.
Some backgroun on ChinaCast:
sec.gov
The press release announcing the deal:
biz.yahoo.com
ChinaCast is one of the leading providers of e-learning services and content to address the needs of K-12 schools, universities, government agencies and corporate enterprises in the PRC. ChinaCast is headquartered in Beijing, China with offices in Shanghai, Hong Kong and Singapore, and has more than 160 employees throughout these locations.
ChinaCast's solutions are tailored to meet the different needs of its end customers in specific market segments, such as University Distance Learning Solutions, K-12 Distance Learning and Educational Content Solutions and Corporate and Government Training Solutions:
--- University Distance Learning Solutions -- ChinaCast provides turnkey distance learning solutions and services to enable universities and higher learning institutions to provide nationwide real-time distance learning services. This includes all the necessary hardware, software and broadband satellite network services to allow university students located at remote classrooms around the country to interactively participate in live lectures broadcast from the main campus. ChinaCast currently provides this service to over 20 universities serving over 86,000 university students located in over 300 remote classrooms. For this service, ChinaCast receives a percentage of each remote student's tuition from the respective university. According to China's Ministry of Education, in 2003, there were over 100 million higher education students in the PRC while universities had sufficient space to accommodate only about 11% of the students qualified to attend.
--- K-12 Distance Learning and Educational Content Solutions -- ChinaCast currently broadcasts its multimedia educational content to over 7,000 primary, middle and high schools throughout the PRC in partnership with leading educational content companies. The multimedia content assists teachers in preparing and teaching the course content. Each school pays ChinaCast an annual subscription fee for this service.
--- Corporate and Government Training Solutions -- ChinaCast provides the satellite distance learning network as well as hardware, software and custom training content to corporate enterprises and government agencies which in turn provide in-house training to their staff. Customers include corporate enterprises such as Taikang Life Insurance, which uses the service to train over 150,000 insurance agents, and government institutions such as the Ministry of Coal and the Ministry of Labor and Social Welfare, which uses the service to provide much needed job skills training to laid-off workers in the rural western part of the PRC. ChinaCast receives an annual subscription fee and/or a per student tuition fee for these services.
ChinaCast's executive directors and executive officers have proven track records, most averaging over 15 years in the IT/Telecom/Media industry in the PRC and Asia-Pacific region. Upon consummation of the Offer, Great Wall intends to retain these persons to lead the combined company and serve as management of the public company.
During 2004, ChinaCast was awarded the "Education User Satisfaction Award" by the Ministry of Education. ChinaCast was also listed as one of the "China Top 15 Companies for Tomorrow, 2004," by China High-Tech Enterprises magazine, which is published by the National Bureau of Statistics of China. This award was based on ChinaCast's growth rate, influence on the industry in which it competes, technology innovations and market coverage |
