Simcere Pharmaceutical Group
) recently announced that the company's board has received a
buyout proposal from Mr. Jinsheng Ren, New Good Management
Limited, Assure Ahead Investments Limited and its
We note that Ren, the Chairman of the board of directors at
Simcere, controls New Good Management Limited, a British Virgin
Islands based entity. Ren founded Simcere in Mar 1995.
As per the proposal, the conglomerate intends to acquire the
entire outstanding ordinary shares of Simcere, for $9.56 per
American Depositary Share (ADS) or $4.78 per ordinary share in
cash (1 ADS = 2 shares).
In response, Simcere's board has formed a special committee of
independent directors, headed by Mr Alan Au, to consider the
proposal. The special committee has retained Shearman &
Sterling LLP as its legal counsel for the proposed transaction.
The proposal is under consideration.
Concurrent with its earnings release a few days back, Simcere
stated that the company will face challenging market conditions
in 2013, including pricing pressure from the government.
We note that Simcere is a major player in the oncology market
in China with drugs such as Endu and Sinofuan. In addition,
Simcere has associations with leading players in the
pharmaceutical space such as
Merck & Company, Inc.
Bristol-Myers Squibb Company
) to expand its product portfolio.
Simcere Pharma currently carries a Zacks Rank #3 (Hold). Right
) looks better placed in the pharma space with a Zacks Rank #2
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