Genetron Health Announces Completion of Going Private Transaction
Genetron Holdings completes merger with Genetron New Co , becoming a wholly owned subsidiary of Parent. Shareholders to receive cash per share and ADS. Company to suspend trading on Nasdaq and deregister securities.
The merger of Genetron Holdings Limited with a new entity and its subsequent withdrawal from public trading is a significant event with direct financial implications. The immediate effect includes liquidity events for shareholders, as shares and ADSs are exchanged for cash. This transaction may suggest confidence by the private entity in Genetron's intrinsic value, potentially due to its specialized focus in precision oncology—a field that has been gaining traction due to its promise for personalized cancer treatment.
From a market perspective, the move to privatize could be interpreted as a strategic pivot to focus on long-term growth without the quarterly scrutiny of public markets, which can be particularly intense for biotech firms. However, it also removes the opportunity for public investors to participate in the company's potential upside. The fixed cash consideration provides immediate value but precludes future gains that might have been realized had the company remained public and achieved success in its endeavors.
The legal aspects of this merger involve several jurisdictions, reflecting the complex nature of cross-border transactions. The involvement of top-tier legal advisors indicates a significant level of due diligence and legal structuring. The choice of these advisors also suggests that the merger has been designed to comply with both U.S. and PRC regulations, which is important for mitigating legal risks associated with such deals.
The deregistration from the Nasdaq and the SEC indicates a shift in regulatory reporting requirements, which will reduce the company's compliance costs and administrative burden. This could potentially allow the company to reinvest those savings into its core business operations. However, it also means less transparency for stakeholders who are used to the disclosures required from publicly traded companies.
The privatization of Genetron Health could have ripple effects within the precision oncology sector. Competitors might view this move as a signal of consolidation in the industry or as an opportunity to capture the market share that Genetron might leave behind in the public domain. For companies operating in the same space, this could indicate a trend towards private investment favoring specialized medical technology firms.
Moreover, the transaction price could serve as a benchmark for similar deals within the industry, influencing the valuation of other companies in the precision oncology market. The long-term impact on the business landscape will depend on how effectively Genetron Health leverages its new private status to advance its technology and market position without the pressures of public market performance metrics.
03/28/2024 - 01:30 PM
BEIJING, March 28, 2024 (GLOBE NEWSWIRE) -- Genetron Holdings Limited (“Genetron Health” or the “Company”, Nasdaq: GTH), a leading precision oncology platform company in China that specializes in offering molecular profiling tests, early cancer screening products and companion diagnostics development, announced today the completion of its merger (the “Merger”) with Genetron New Co Limited (“Merger Sub”), pursuant to the previously announced agreement and plan of merger, dated as of October 11, 2023 (the “Merger Agreement”), among the Company, New Genetron Holding Limited (“Parent”) and Merger Sub. As a result of the Merger, the Company has become a wholly owned subsidiary of Parent and will cease to be a publicly traded company.
Pursuant to the terms of the Merger Agreement, which was approved by the Company’s shareholders at an extraordinary general meeting held on February 21, 2024, each ordinary share, par value US$0.00 002 per share, of the Company (each, a “Share”) issued, outstanding and not represented by American depositary share of the Company (each, an “ADS,” representing fifteen (15) Shares) immediately prior to the effective time of the Merger (the “Effective Time”), other than the Excluded Shares and the Dissenting Shares (each as defined in the Merger Agreement), has been cancelled and ceased to exist, in exchange for the right to receive US$0.27 2 in cash per Share without interest (the “Per Share Merger Consideration”), and each ADS, issued and outstanding immediately prior to the Effective Time, other than ADSs representing the Excluded Shares, together with each Share represented by such ADS, has been cancelled and ceased to exist, in exchange for the right to receive US$4.08 in cash per ADS without interest (less applicable fees, charges and expenses payable by ADS holders, and such consideration, together with the Per Share Merger Consideration, the “Merger Consideration”).
Registered shareholders immediately prior to the Effective Time who are entitled to the Merger Consideration will receive a letter of transmittal and instructions on how to surrender their Shares in exchange for the Merger Consideration and should wait to receive the letter of transmittal before surrendering their Shares. Payment of the Merger Consideration will be made to holders of Shares (other than Shares represented by ADSs) in respect of each such Share held thereby upon surrender of applicable Shares and delivery of the letter of transmittal and any other documents required by such letter of transmittal to be delivered in connection therewith. Payment of the Merger Consideration (after deduction of the fees, charges, deductions and expenses provided for under the Deposit Agreement, dated June 18, 2020, between the Company, the ADS depositary and the holders and beneficial owners of ADSs issued thereunder) will be made to holders of ADSs in respect of each ADS held thereby as soon as practicable after The Bank of New York Mellon, the ADS depositary, receives the aggregate Merger Consideration payable to holders of ADSs from the paying agent.
The Company also announced today that it has requested that trading of its ADSs on the Nasdaq Global Market (the “Nasdaq”) be suspended as of the close of trading on March 28, 2024 (New York time). The Company has requested that Nasdaq file a Form 25 with the Securities and Exchange Commission (the “SEC”) notifying the SEC of the delisting of the ADSs on Nasdaq and the deregistration of the Company’s registered securities. The deregistration will become effective 90 days after the filing of the Form 25 or such shorter period as may be determined by the SEC. The Company intends to suspend its reporting obligations under the Securities Exchange Act of 1934, as amended, by filing a Form 15 with the SEC in approximately ten days following the filing of the Form 25. The Company’s obligations to file with the SEC certain reports and forms, including Form 20-F and Form 6-K, will be suspended immediately as of the filing date of the Form 15 and will cease once the deregistration becomes effective.
Kroll, LLC (operating through its Duff & Phelps Opinions Practice) is serving as the financial advisor to the committee of independent and disinterested directors established by the Board (the “Special Committee”), and Davis Polk & Wardwell LLP is serving as U.S. legal counsel to the Special Committee and the Company.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as U.S. legal counsel to the investor consortium (the “Consortium”), and King & Wood Mallesons is serving as PRC legal counsel to the Consortium.
Certain legal matters with respect to the Cayman Islands law are advised by Walkers (Hong Kong).
About Genetron Holdings Limited
Genetron Holdings Limited (“Genetron Health” or the “Company”) (Nasdaq: GTH) is a leading precision oncology platform company in China that specializes in cancer molecular profiling and harnesses advanced technologies in molecular biology and data science to transform cancer treatment. The Company has developed a comprehensive oncology portfolio that covers the entire spectrum of cancer management, addressing needs and challenges from early screening, diagnosis and treatment recommendations, as well as continuous disease monitoring and care. Genetron Health also partners with global biopharmaceutical companies and offers customized services and products. For more information, please visit ir.genetronhealth.com.
Safe Harbor Statement
This press release contains forward-looking statements made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Genetron Health may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Genetron Health’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in Genetron Health’s filings with the SEC. All information provided in this announcement and in the attachments is as of the date of this press release, and Genetron Health does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
Investor Relations Contact
What is the ticker symbol for Genetron Holdings ?
The ticker symbol for Genetron Holdings is GTH.
What was announced in the press release regarding Genetron Holdings ?
The press release announced the completion of the merger of Genetron Holdings with Genetron New Co , making it a wholly owned subsidiary of Parent.
What will shareholders receive as part of the merger with Genetron New Co ?
Shareholders will receive US$0.272 in cash per Share and US$4.08 in cash per ADS.
What action will Genetron Holdings take regarding trading on Nasdaq?
Genetron Holdings has requested the suspension of trading of its ADSs on the Nasdaq Global Market and the delisting of the ADSs.
Who is serving as the financial advisor to the Special Committee of Genetron Holdings ?
Kroll, (operating through its Duff & Phelps Opinions Practice) is serving as the financial advisor to the committee of independent and disinterested directors established by the Board.
