Conyers advises on landmark Cayman Islands privatization - April 2011

David Lamb • Posted 28/04/2011 • Under Deals & Cases

Conyers has advised on the US$150 million acquisition of Tongjitang Chinese Medical Company (“TCM”), the first privatization of a Cayman company listed on a US stock exchange (NYSE) to use the merger provisions which were introduced into the Companies Law in 2009.

The merger provisions provide a more attractive procedure for privatizations and takeovers and the transaction paves the way for companies listed on other exchanges to consider a similar structure.

Conyers advised the buying consortium, Hanmax Investment Limited, Fosun Industrial Co., Limited and Tonsun International Company Limited. David Lamb, a partner in Conyers’ Hong Kong office, devised the structure and worked with a team of lawyers from Baker & McKenzie, led by partner Scott Clemens.

David Lamb commented: “The TCM privatization is a landmark deal as it was the first privatization of a Cayman company listed on a US exchange to use the merger provisions in the Companies Law which were only introduced in 2009. There are numerous benefits to using this structure including a lower approval threshold and avoiding the court process required by a traditional scheme of arrangement. Conyers is currently instructed on the buy side in several similar deals and there is no reason why companies listed on other exchanges should not consider a similar structure, including those listed on HKEx.”

TCM is a leading specialty pharmaceutical company focusing on the development, manufacturing, marketing and selling of modernized traditional Chinese medicines in China.