Following the news of a merger deal, BEST Inc. (NYSE: BEST) shares have experienced a significant rise in value. At $2.65 as of the most recent current market check, BEST stock was up 15.22%.
Merger Agreement
BEST Global Partners along with its wholly-owned subsidiary Phoenix Global Partners and BEST Inc. agreed into an agreement and a plan of merger. Both BEST Global Partners and Phoenix Global Partners are limited liability companies that are exempted from taxation under Cayman Islands laws.
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Phoenix Global and BEST Inc. are to merge, according to the agreement, with BEST Inc. remaining as the surviving corporation. Following the transaction, BEST Inc. will become BEST Global Partners’ sole subsidiary. The deal suggests that BEST Inc.’s equity is valued at around $54.2 million.
Financial Implications And Shareholder Approval
A premium of around 25.2% over the closing price of the Company’s American Depositary Shares (ADSs) on June 18, 2024, is offered by the merger consideration. The trading day that came before the news was this one. A mix of financial contributions from the Sponsors, as detailed in individual equity commitment letters, and equity rollovers of Rollover Shares and ADSs by a few Consortium Members will be used to finance the merger.
BEST Inc. expects the deal to close in the third quarter of 2024, subject to customary closing requirements. This comprises shareholders representing at least two-thirds of the voting power of the shares present and voting at a general meeting, either in person or by proxy, approving the merger agreement.
Future of BEST Inc. Post-Merger
Consortium Members have agreed to vote in favor of the Merger Agreement and the merger itself. As of the Merger Agreement date, they together held around 94.5% of the voting rights connected to the outstanding shares. Following completion, BEST Inc. will delist its ADSs from the New York Stock Exchange and become a privately owned company.
The transition to private ownership aims to streamline operations and potentially focus on long-term growth strategies without the pressures of public market scrutiny. This significant move marks a pivotal shift in BEST Inc.’s corporate structure and market presence.
