Exhibit 99.1
UTStarcom Announces Receipt of a Preliminary Non-Binding Proposal
to Acquire the Company
Hong Kong, March 31, 2017 — UTStarcom Holdings Corp. (NASDAQ: UTSI) (the “Company” or “UTStarcom”) today announced that its board of directors (the “Board”) has received a preliminary non-binding proposal letter, dated March 31, 2017, from Shah Capital Opportunity Fund LP, Himanshu H. Shah (together with Shah Capital Opportunity Fund LP, the “Shah Parties”), Hong Liang Lu and his affiliates (the “Lu Parties”) and Tenling Ti (“Mr. Ti”, collectively with the Shah Parties and the Lu Parties, the “Consortium Members”), to acquire all of the outstanding ordinary shares of the Company not owned by the Consortium Members, for US$2.15 in cash per ordinary share. A copy of the proposal letter is attached hereto as Exhibit A. The Board has formed a special committee consisting of two independent and disinterested directors, Sean Shao and Xiaoping Li (the “Special Committee”), to consider the proposal.
The Company cautions its shareholders and others considering trading its securities that the Board has just received the proposal letter and neither the Board nor the Special Committee has had an opportunity to carefully review and evaluate the proposal or make any decision with respect to the Company’s response to the proposal. There can be no assurance that any definitive offer will be made, that any definitive agreement will be executed relating to the proposed transaction or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.
About UTStarcom Holdings Corp.
UTStarcom (NASDAQ: UTSI) is a global telecom infrastructure provider dedicated to developing technology that will serve the rapidly growing demand for bandwidth from cloud-based services, mobile, streaming, and other applications. We work with carriers globally, from Asia to the Americas, to meet this demand through a range of innovative broadband packet optical transport and wireless/fixed-line access products and solutions. The Company’s end-to-end broadband product portfolio, enhanced through in-house Software Defined Networking (SDN)-based orchestration, enables mobile and fixed-line network operators and enterprises worldwide to build highly efficient and resilient future-proof networks for a range of applications, including mobile backhaul, metro aggregation, broadband access and Wi-Fi data offload. Our strategic investments in media operational support service providers expand UTStarcom’s capabilities in the field of next generation video platforms. UTStarcom was founded in 1991, started trading on NASDAQ in 2000, and has operating entities in Hong Kong; Tokyo, Japan; San Jose, USA; Delhi and Bangalore, India; Hangzhou, China. For more information about UTStarcom, please visit http://www.utstar.com.
For investor and media inquiries, please contact:
UTStarcom Holdings Corp.
Tel: +852-3951-9757
Fei Wang, IR Director
Email: fei.wang@utstar.com
Ning Jiang, Investor Relations
Email: njiang@utstar.com
In the United States:
The Blueshirt Group
Mr. Ralph Fong
Tel: +1 (415) 489-2195
Email: ralph@blueshirtgroup.com
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Exhibit A
Preliminary Non-binding Proposal to Acquire UTStarcom Holdings Corp.
March 31, 2017
The Board of Directors
UTStarcom Holdings Corp.
Level 6, 28 Hennessy Road
Admiralty, Hong Kong
Dear Members of the Board of Directors,
We, Shah Capital Opportunity Fund LP, Himanshu H. Shah (together with Shah Capital Opportunity Fund LP, the “Shah Parties”), Hong Liang Lu and his affiliates (the “Lu Parties”) and Tenling Ti (“Mr. Ti”, collectively with the Shah Parties and the Lu Parties, the “Consortium Members”), are pleased to submit this preliminary non-binding proposal (the “Proposal”) to acquire all of the outstanding ordinary shares (the “Shares” and each individually, a “Share”) of UTStarcom Holdings Corp. (the “Company”) that are not already owned by the Consortium Members in a “going private” transaction on the principal terms and conditions described in this Proposal (the “Transaction”).
We believe that our Proposal provides a very attractive opportunity to the Company’s shareholders. Our Proposal represents a premium of 15% to the closing price of the Company’s Shares of $1.87 on March 30, 2017 and a premium of 19%, 19% and 11% to the volume weighted average closing price of the Company’s Shares during the last 30, 50 and 200 trading days respectively.
Set forth below are the key terms of our Proposal. We are confident that the Transaction can be closed on the basis outlined in this Proposal.
I. Consortium
The Consortium Members have entered into an agreement, pursuant to which we will form an acquisition vehicle for the purpose of implementing the Transaction and have agreed to work with each other exclusively in pursuing the Transaction. Please note that the Consortium Members are interested only in pursuing the Transaction and are not interested in selling their Shares in any other transaction involving the Company.
II. Purchase Price
We propose to offer, in exchange for each of the Company’s Shares acquired in the Transaction, US$2.15 in cash.
III. Financing
It is anticipated that the funding for the purchase of all the outstanding Ordinary Shares that are not already owned by the Consortium Members will be provided by equity capital. Equity capital will be provided (i) by the Shah Parties and Mr. Ti in the form of cash and rollover equity in the Company; and (ii) by Lu Parties in the form of rollover equity. To the extent necessary, we may take a bridge loan to cover short term financing needs of the Transaction. We are confident in timely securing adequate financing to consummate the Transaction.
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IV. Definitive Documentation
We are prepared to negotiate and finalize definitive agreements (the “Definitive Agreements”), including a merger agreement, as well as other customary agreements for a transaction of this nature. The Proposal is subject to execution of the Definitive Agreements, each containing terms and conditions typical, customary and appropriate for transactions of this type.
V. Confidentiality
The Consortium Members will, as required by law, promptly file an amendment to the Schedule 13D with the Securities and Exchange Commission to disclose this Proposal. However, we are sure that you will agree that it is in all of our interests to ensure that we proceed in a confidential manner unless otherwise required by law or until we have executed the Definitive Agreements.
VI. Advisor
The Consortium Members have retained DeHeng Law Offices as legal counsel.
VII. Process
We believe that the Transaction will provide superior value to the Company’s public shareholders. We recognize of course that the board of directors of the Company will evaluate the Transaction independently before it can make its determination whether to endorse it.
VIII. No Binding Commitment
This Proposal is not a binding offer, agreement or agreement to make a binding offer or agreement at any point in the future. This Proposal is a preliminary indication of interest by the Consortium Members and does not contain all matters upon which agreement must be reached in order to consummate the proposed Transaction, nor does it create any binding rights or obligations in favor of any person. The parties will be bound only upon the execution of the Definitive Agreements, and then will be on the terms provided therein.
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In closing, we would like to express our commitment to working together to bring this Transaction to a successful and timely conclusion. Should you have any questions regarding this Proposal, please do not hesitate to contact us. We look forward to hearing from you.
Sincerely,
Shah Capital Opportunity Fund LP |
By: Shah Capital LLC, the General Partner |
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By: | /s/ Himanshu H. Shah | |
| Name: Himanshu H. Shah | |
| Title: Managing Member | |
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Himanshu H. Shah | |
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By: | /s/ Himanshu H. Shah | |
| Name: Himanshu H. Shah | |
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Hong Liang Lu | |
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By: | /s/ Hong Liang Lu | |
| Name: Hong Liang Lu | |
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| �� | |
Lu Charitable Remainder Trust | |
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By: | /s/ Hong Liang Lu | |
| Name: Hong Liang Lu | |
| Title: Trustee | |
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Lu Family Trust | |
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By: | /s/ Hong Liang Lu | |
| Name: Hong Liang Lu | |
| Title: Trustee | |
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The Lu Family Limited Partnership |
By: Hong Liang Lu, the General Partner |
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By: | /s/ Hong Liang Lu | |
| Name: Hong Liang Lu | |
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Tenling Ti | |
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By: | /s/ Tenling Ti | |
| Name: Tenling Ti | |
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