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Cordlife Group said on Tuesday that it has rejected an unsolicited third party offer for its shares in China Cord Blood Corporation (CCBC) and the convertible notes due 2017.
Instead, it would proceed with an earlier plan to sell them to Hang Seng-listed healthcare company, Golden Meditech.
"After due and careful consideration, the board has decided to reject the offer,'' said Cordlife, a Singapore cord blood bank.
"In coming to its decision, the board considered a number of relevant commercial and legal factors, including the fact that the company had already signed the binding agreement with the purchaser, the obligations agreed to be performed by the company under the agreement, the terms and conditions of the offer and the relative timing and completion risks associated with each of the agreement and the offer,'' it said.
On April 27, 2015, Golden Meditech had issued a non-binding proposal letter to the board of directors of CCBC on its plan to acquire all CCBC shares which it did not already directly or indirectly owned at US$6.40 each in cash. It also planned to buy all the 7 per cent senior unsecured convertible notes of CCBC at US$7 a note. At that time, Golden Meditech, together with affiliates, owned 35.2 per cent of CCBC.
In May, Cordlife agreed to sell its 7.3 million ordinary shares in CCBC and the convertible notes to Golden Meditech. On completion, Cordlife said it would receive a minimum of S$146.5 million in cash and book a gain of S$58 million.
The transaction is subject to approval by Cordlife's and Golden Meditech's shareholders, in EGMs to be held no later than Oct 2015.
CCBC is the largest umbilical cord blood banking operator in China in terms of geographical coverage and is the only cord blood banking operator with multiple licences in the mainland.