Leading Investor Group Proposes to Acquire China Biologic Products for US$118.00 Per Share in Cash

Proposal Provides Immediate and Significant Value to China Biologic Products’ Shareholders

BEIJING--()--A consortium composed of Mr. David (Xiaoying) Gao, GL Capital Group, Bank of China Group Investment Limited and CDH Investments (the “Consortium”) today announced it has made a non-binding proposal to acquire all of the outstanding common shares of China Biologic Products Holdings, Inc. (“China Biologic” or the “Company”) (NASDAQ: CBPO), that are not already held by the Consortium, for US$118.00 per share in an all-cash transaction valued at approximately US$3.9 billion. The proposal was conveyed on August 17, 2018 in a letter to China Biologic’s Board of Directors.

The Consortium’s proposal represents an approximate 30% premium to China Biologic’s closing share price on August 16, 2018, and an approximate 40% premium to the Company’s closing price on June 8, 2018, the last trading day before CITIC Capital’s proposal to acquire the Company for US$110.00 per share was conveyed.

Commenting on its offer, the Consortium stated: “Our proposal delivers immediate and attractive value to China Biologic’s shareholders and provides the Company the ideal partners to support its future growth. As a private company, China Biologic will have the additional operational flexibility and financial support to build on its successful track record as China’s leading plasma player while navigating the current challenges facing the country’s biopharma industry.”

Our compelling proposal benefits all of China Biologic’s stakeholders and we want to work collaboratively with the Board to complete a transaction in an efficient and expeditious manner. We also want to partner with the current management team as we take the Company forward.”

The Consortium has received from Goldman Sachs (Asia) L.L.C. (“Goldman Sachs”) a non-binding letter indicating that, subject to the assumptions, terms and conditions in the letter and such other matters as Goldman Sachs considers relevant, Goldman Sachs is, as of the date of the letter, highly confident that as sole lead arranger, sole bookrunner and sole syndication agent, the structuring and syndication of a senior secured debt financing could be accomplished by Goldman Sachs as part of the financing for the acquisition described therein.

Goldman Sachs is acting as financial advisor to the Consortium, Skadden, Arps, Slate, Meagher & Flom LLP is acting as its U.S. legal advisor, and Conyers, Dill & Pearman is acting as its Cayman Islands legal advisor.

Below is the text of the letter sent on August 17, 2018 to China Biologic’s Board of Directors:

August 17, 2018

The Board of Directors
China Biologic Products Holdings, Inc.
18th Floor, Jialong International Building
19 Chaoyang Park Road
Chaoyang District, Beijing 100125
People’s Republic of China

Dear Members of the Board of Directors:

Feng Tai Global Limited, a company beneficially owned by Mr. David (Xiaoying) Gao (“Mr. Gao”), GL Sandrose Investment L.P., a limited partnership controlled and managed by GL Capital Group (“GL Capital”), World Investments Limited, a company controlled and managed by Bank of China Group Investment Limited (“BOCGI”), and CDH Utopia Limited, a company controlled and managed by CDH Investments (“CDH”, together with Mr. Gao, GL Capital and BOCGI, the “Consortium”, “we” or “us”), are pleased to submit this preliminary non-binding proposal (“Proposal”) to acquire all the outstanding ordinary shares of China Biologic Products Holdings, Inc. (the “Company”) that are not already held by the members of the Consortium (the “Acquisition”).

We believe that our Proposal provides a very attractive opportunity for the Company’s shareholders to realize substantial and immediate returns while ensuring long term growth and continued investment in the Company’s business. Subject to the Company’s agreement to redeem its rights plan, we would also welcome any shareholders who are interested in joining our effort. Key terms of our Proposal include:

  1. Consortium. Members of the Consortium intend to form an acquisition company for the purpose of implementing the Acquisition, and have agreed to work exclusively within the framework of the Consortium in pursuing the Acquisition.
  2. Purchase Price. The consideration payable for each ordinary share of the Company is proposed to be $118 per ordinary share in cash (in each case other than those ordinary shares held by the members of the Consortium). Our proposal represents a premium of approximately 30% to the Company’s closing price on August 16, 2018, and a premium of approximately 40% to the closing price as of June 8, 2018, the last trading day before the publication of the offer submitted to the Board of the Company by CITIC Capital Holdings Limited.
  3. Funding. We intend to finance the Acquisition with a combination of debt and equity capital. We have engaged Goldman Sachs (Asia) LLC (“Goldman Sachs”) to act as our financial advisor and to arrange the senior secured debt financing. We have received from Goldman Sachs a highly confident letter dated the date hereof indicating that Goldman Sachs is highly confident of its ability to fully underwrite a senior secured credit facility for the Acquisition as sole lead arranger, sole bookrunner and sole syndication agent. Equity financing would be provided from and arranged by the members of the Consortium.
  4. Process; Due Diligence. We believe that the Acquisition will provide superior value to the Company’s shareholders. We trust that the Company’s Board of Directors will evaluate the Acquisition fairly and independently before it can make its determination to endorse it. We have engaged Skadden, Arps, Slate, Meagher & Flom LLP as our U.S. legal counsel and Conyers, Dill & Pearman as our Cayman Islands legal counsel. We believe that we will be in a position to complete customary legal, financial and accounting due diligence for the Acquisition in a timely manner and in parallel with discussions on the Definitive Agreements. We believe that with the right cooperation from the Company and its Board, we would be able to enter into Definitive Agreements within four (4) weeks from the start of the discussions.
  5. Definitive Agreements. We are prepared to promptly negotiate and finalize definitive agreements (the “Definitive Agreements”) providing for the Acquisition and related transactions while conducting our due diligence process. These documents will provide for representations, warranties, covenants and conditions which are typical, customary and appropriate for transactions of this type.
  6. Confidentiality. Although we would have preferred to keep our Proposal strictly private, certain members of the Consortium will have to file with the SEC a Schedule 13D within ten (10) calendar days of the date hereof. That filing will, as required by law, need to disclose this letter and the formation of the Consortium as a buyer group. Assuming we are working together in good faith towards the Definitive Agreements, we would be pleased to coordinate a joint press release to be issued at or prior to the time of the Consortium’s SEC filing.
  7. Business and Operations of the Company. The members of the Consortium remain committed to continuing and building on the track record of the Company as the leading plasma player in China. Through future investments in research and development and in the infrastructure, we plan not only to deliver significant returns to investors, but importantly contribute to the improved care for patients in China.
  8. Management. It is our belief that in order to deliver on our commitments of growth, we will need and seek continued support from the Company’s current management team. To that end, we would like the management team to remain meaningful shareholders in the business and we would plan, at the appropriate time, to engage in relevant discussions with them.
  9. About Mr. Gao. Mr. Gao served as the Chairman and CEO of the Company from March and May 2012 to July 2018. During Mr. Gao’s tenure at the Company, the market capitalization of the Company grew from around $250 million to more than $3 billion, with diluted EPS growing from $0.37 in 2011 before he took the office to $2.38 in 2017, representing a CAGR of 36%. Before joining the Company, Mr. Gao served in various senior executive positions in private and public companies in pharmaceutical and other industries, including the CEO of BMP Sunstone Corporation (NASDAQ: BJGP), the Chairman of the Board of Directors at BMP China, the President and CEO of Abacus Investments Ltd., a private wealth management company, and various executive positions at Motorola, Inc.
  10. About GL Capital. GL Capital is a Greater China healthcare-focused, value-driven investment management group. Since inception in 2010, GL Capital has developed a reputation as the partner-of choice for leading healthcare companies and demonstrated capability to add value to its portfolio companies.
  11. About BOCGI. BOCGI is the principal direct investment platform of Bank of China. Established in 1984, BOCGI has made extensive investment in various sectors benefiting from China’s economic growth.
  12. About CDH. Established in 2002, CDH is a leading China-focused alternative asset manager with approximately US$19 billion of assets under management. Since inception, CDH has invested in more than 200 companies and has helped more than 60 companies successfully list on international and China's domestic stock exchanges.
  13. No Binding Commitment. This letter does not contain all matters upon which agreement must be reached in order to consummate the proposed Acquisition described above, constitutes only a preliminary indication of our interest, and does not constitute any binding commitment with respect to the Acquisition. A binding commitment will result only from the execution of Definitive Agreements, and then will be on terms and conditions provided in such documentation. Nothing herein shall obligate any person to engage in or continue discussions regarding the proposed Acquisition, and any of us may terminate discussions at any time for any reason or no reason. Any actions taken by any person in reliance on this Proposal shall be at that person’s own risk and cost.
  14. Next Steps. We are ready to move rapidly to complete the proposed Acquisition and are available to answer any questions regarding our Proposal. We would like to receive a response to our Proposal from the Company’s Board by August 27, 2018.

In closing, we would like to express our commitment to working together to bring this Acquisition to a successful and timely conclusion. We look forward to hearing from you.


Feng Tai Global Limited
/s/ David (Xiaoying) Gao

GL Sandrose Investment L.P.
/s/ Shirley Lin
Authorized Representative

World Investments Limited
/s/ Han Li
Authorized Representative

CDH Utopia Limited
/s/Shuge Jiao

Forward-looking Statements

This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the Consortium’s offer to acquire the Company, its financing of the proposed transaction, its expected future performance (including expected results of operations, financial condition, strategy and plans). Forward-looking statements may be identified by the use of the words “anticipates,” “expects,” “intends,” “plans,” “should,” “could,” “would,” “may,” “will,” “believes,” “estimates,” “potential,” “target,” “opportunity,” “tentative,” “positioning,” “designed,” “create,” “predict,” “project,” “seek,” “ongoing,” “upside,” “increases” or “continue” and variations or similar expressions. These statements are based upon the current expectations and beliefs of the Consortium and are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results to differ materially from those described in the forward-looking statements. These assumptions, risks and uncertainties include, but are not limited to, assumptions, risks and uncertainties discussed in the Company's most recent annual or quarterly report filed with the Securities and Exchange Commission (the “SEC”) and assumptions, risks and uncertainties relating to the Consortium's proposed acquisition, which will be detailed from time to time in the Company's and/or the Consortium's filings with the SEC, which factors are incorporated herein by reference.

Important factors that could cause actual results to differ materially from the forward-looking statements we make in this communication are set forth in other reports or documents that we file from time to time with the SEC and, and include, but are not limited to:

  • the ultimate outcome of any possible transaction between the Consortium and the Company including the possibilities that the Consortium will not pursue a transaction with the Company and that the Company will reject a transaction with the Consortium;
  • if a transaction between the Consortium and the Company were to occur, the ultimate outcome and the effects of the transaction, including the Company’s future financial condition, operating results, strategy and plans;
  • ability to obtain regulatory approvals and meet other closing conditions to the transaction, including all necessary approvals from the shareholders of the Company, on a timely basis;
  • the availability and access of funds sufficient to meet our equity and debt financing required to consummate the transaction in a timely manner; and
  • the risks and uncertainties detailed by the Company with respect to its business as described in its reports and documents filed with the SEC.

All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on any of these forward-looking statements. These forward-looking statements speak only as of the date hereof. The Consortium undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this communication or to reflect actual outcomes.

Additional Information

This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates to a preliminary non-binding proposal which the Consortium has made for an acquisition transaction with the Company. In furtherance of the Consortium’s acquisition proposal and subject to future developments, the Consortium (and, if a negotiated transaction is agreed, the Company) may file one or more proxy statements or other documents with the SEC. This communication is not a substitute for any proxy statement or other documents the Consortium and/or the Company may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT(s) AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Any definitive proxy statement(s) (if and when available) will be mailed to stockholders of the Company, as applicable. Investors and security holders will be able to retrieve and review, free of charge, these documents (if and when available) and other documents filed with the SEC by the Consortium and/or the Company through the web site maintained by the SEC at http://www.sec.gov.


Sard Verbinnen & Co
Ron Low/Yin Ai
+852 3842 2200
RLow@sardverb.com or YAi@sardverb.com
Matt Benson/Alyssa Linn
+1 212 687 8080/+1 310 201 2040
MBenson@sardverb.com or ALinn@sardverb.com

Release Summary

Leading Investor Group Proposes to Acquire China Biologic Products for US$118.00 Per Share in Cash


Sard Verbinnen & Co
Ron Low/Yin Ai
+852 3842 2200
RLow@sardverb.com or YAi@sardverb.com
Matt Benson/Alyssa Linn
+1 212 687 8080/+1 310 201 2040
MBenson@sardverb.com or ALinn@sardverb.com