Gelonghui March 8, 丨 Dongyangguang Changjiang Pharmaceutical (01558.HK) announced that its parent company Guangdong Dongyangyang Pharmaceutical Co., Ltd. was informed that the latter and its wholly-owned subsidiary Hong Kong Dongyangyang Sales Co., Ltd. (the company's direct shareholder, holds 226 million H shares, equivalent to about 25.71% of the company's total issued share capital) entered into a share transfer agreement on March 8, 2024. According to this, Hong Kong Dongyangyang will transfer sales shares to Guangdong Dongyangyang Pharmaceutical in accordance with the terms and conditions of the agreement, at a consideration of HK$9.14 per share. The total consideration for the share transfer was HK$2,067 billion.
The transfer of the rights and obligations associated with the sale of shares and the profits and losses arising therefrom was settled on March 8, 2024.
The company has been advised by Guangdong Dongyangguang Pharmaceutical that the share transfer is part of a group restructuring or involves a possible merger between Guangdong Dongyangguang Pharmaceutical and the company. The ultimate beneficial owners of Guangdong Dongyangguang Pharmaceutical are Ms. Guo Meilan and Mr. Zhang Yushuai. Together, they own about 62.12% of Guangdong Dongyang Pharmaceutical's shares. The ultimate beneficial owners of Guangdong Dongyangguang Pharmaceutical (i.e. Ms. Guo Meilan and Mr. Zhang Yushuai) and their joint holdings in Guangdong Dongyangguang Pharmaceutical will not change immediately before and after the delivery.
The company has noticed that the price and trading volume of the company's shares increased on March 1, 2024. The company has made inquiries to Guangdong Dongyangguang Pharmaceutical and learned that Guangdong Dongyangguang Pharmaceutical is considering absorbing and merging the company through a share exchange. Guangdong Dongyangyang Pharmaceutical aims to introduce new product lines through possible mergers (1) to build a pharmaceutical industry chain integrating R&D, production and sales, and to build a world-leading integrated pharmaceutical enterprise by opening up domestic and foreign sales channels; (2) improving the overall operating efficiency of the enterprise by shortening business decision-making processes, reducing management costs, and (3) enabling the company to share Guangdong Dongyang Pharmaceutical's comprehensive and complete independent R&D system and R&D platform covering the entire life cycle of drugs to ensure long-term growth potential and achieve long-term value creation.
Guangdong Dongyangguang Pharmaceutical has informed the company that its current proposal is to provide the cancellation price of Guangdong Dongyangguang Pharmaceutical's new H shares listed on the main board of the Stock Exchange in the form of an introduction as a cancellation price for the company's H shares according to a possible merger. Applications for a possible listing are currently being prepared and will be submitted to the Stock Exchange when ready. Once the possible merger is completed, the company's listing status on the Stock Exchange will be cancelled. The possible merger and possible listing are still in the preliminary stages, and it is difficult to determine whether a possible merger or possible listing will take place.
The company has applied to the Stock Exchange to resume trading of the company's shares on the Stock Exchange from 9:00 a.m. on March 11, 2024.