INTRODUCTORY NOTE
The following constitutes Amendment No. 10 (this “Amendment”) to the Schedule 13D filed by the undersigned on June 10, 2011, as amended and/or supplemented by Amendment No. 1 to the Schedule 13D filed on August 26, 2011, Amendment No. 2 to the Schedule 13D filed on September 7, 2011, Amendment No. 3 to the Schedule 13D filed on September 9, 2011, Amendment No. 4 to the Schedule 13D filed on October 16, 2012, Amendment No. 5 to the Schedule 13D filed on December 28, 2012, Amendment No. 6 to the Schedule 13D filed on May 17, 2013, Amendment No. 7 to the Schedule 13D filed on September 25, 2013, Amendment No.8 to the Schedule 13D filed on October 16, 2013 and Amendment No.9 to the Schedule 13D filed on November 26, 2013 (as amended, the “Schedule 13D”). Except as specifically amended by this Amendment, the Schedule 13D remains in full force and effect. Capitalized terms used but not defined in this Amendment have meanings provided in the Schedule 13D.
Item 2. Identity and Background.
The response set forth in Item 2 of the Schedule 13D is hereby amended and supplemented by the following.
This Amendment is being filed jointly on behalf of (i) Morgan Stanley, a Delaware corporation (“MS Parent”), (ii) MS Holdings Incorporated, a Delaware corporation (“MS Holdings”), (iii) Morgan Stanley Private Equity Asia III, Inc., a Delaware corporation (“MS Inc”), (iv) Morgan Stanley Private Equity Asia III, L.L.C., a Delaware limited liability company (“MS LLC”), (v) Morgan Stanley Private Equity Asia III, L.P., a Cayman Islands limited partnership (“MS LP”), (vi) Morgan Stanley Private Equity Asia Employee Investors III, L.P., a Cayman Islands limited partnership (“MS Employee”), (vii) Morgan Stanley Private Equity Asia III Holdings (Cayman) Ltd, a Cayman Islands limited liability company (“MSPEA Holdings”) and (viii) MSPEA Agriculture Holding Limited, a Cayman Islands limited liability company (“MSPEA”) (collectively, the “Reporting Persons”). The Reporting Persons have entered into a joint filing agreement, dated as of March 26, 2014, a copy of which is attached hereto as Exhibit 99.1.
The name, business address, present principal occupation or employment and citizenship of each director and executive officer of MS Parent, MS Holdings, MS Inc, MSPEA Holdings and MSPEA, and the name, business address, present principal occupation or employment and citizenship of each executive officer of MS LLC, MS LP and MS Employee are set forth in Schedule A attached hereto and incorporated herein by reference.
During the last five years, none of the Reporting Persons, nor, to the knowledge of the Reporting Persons, any of the persons listed on Schedule A attached hereto and incorporated herein by reference, has been (1) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (2) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws, other than, in the case of clause (2), as described in Schedule B attached hereto and incorporated herein by reference.
Item 3. Source and Amount of Funds or Other Considerations
Item 3 of the Schedule 13D is hereby amended and supplemented by adding the following at the end thereof:
The Reporting Persons anticipate that an additional $15.7 million will be required to fund the additional merger consideration as described in Item 4 below. The increased financing for the merger in connection with the increase in offer price contemplated by the Proposal Letter (as defined below) will be funded by proceeds under the facility made available by CDB pursuant to the Facility Contract.
Item 4. Purpose of the Transaction
Item 4 of the Schedule 13D is hereby amended and supplemented by adding the following at the end thereof:
CUSIP No. 98607B106 | SC 13D | Page 12 |
On March 5, 2014, the Company held a special meeting of stockholders of the Company to consider the proposal to approve the Merger Agreement. The proposal did not receive approval from at least a majority of the issued and outstanding Publicly Held Shares. As a result, the Merger Agreement was not approved by the Company’s stockholders at the meeting.
On March 26, 2014, the Consortium submitted a proposal via electronic mail (the “Proposal”) to the special committee of the board of directors of the Company (the “Special Committee”), pursuant to which it offered to increase the previously offered merger consideration payable to holders of the Publicly Held Shares in connection with the proposed merger from $6.69 per share to $7.00 per share.
The contents of the Proposal is replicated below:
Dear Special Committee Members,
Mr. Zishen Wu, MSPEA Agriculture Holding Limited, Lead Rich International Limited and Full Alliance International Limited (collectively, the “Buyer Consortium”) are pleased to submit this revised non-binding proposal to acquire all outstanding shares of the common stock of Yongye International, Inc. (the “Company”) not currently owned by members of the Buyer Consortium. We believe our revised offer is extremely attractive in terms of price and provides the best alternative available to the Special Committee to maximize stockholders value.
Our revised proposal consists of the following terms:
| Price Increase. Increase the merger consideration to $7.00 in cash per share of the Company’s common stock, which increase will be conditioned upon the Special Committee’s modification of the “Requisite Company Vote” requirement in the merger agreement as described below. Our increased offer price represents a premium of approximately 6.1% to our original offer price of $6.60, a premium of 31.8% to the Company’s closing price on March 7, 2014, the last trading day of the week during which the Merger Agreement was not approved by the Company’s stockholders, and a premium of 4.6% to the per share merger consideration of $6.69 under the original merger agreement. |
| “Requisite Company Vote” Requirement. As condition to the Buyer Consortium’s increase of the merger consideration, the Special Committee will modify clause (iii) of the “Requisite Company Vote” requirement in the merger agreement to provide that the voting requirement thereunder is the approval by a majority of the outstanding shares held by the unaffiliated common stockholders that are present in person or by proxy and voting for or against approval of the merger agreement at the stockholders’ meeting, instead of a majority of all issued and outstanding shares held by the unaffiliated common stockholders as contemplated under the current merger agreement. |
We believe our proposed change to the “Requisite Company Vote” requirement is fair and reasonable to the Company’s unaffiliated stockholders, particularly in the context of our willingness to increase the merger consideration, and in light of the fact that a substantial majority of shares held by unaffiliated stockholders who were present in person or by proxy at the previous stockholders meeting were voted in favor of the original merger agreement.
We welcome the opportunity to discuss this proposal with the Special Committee and its advisors as soon as possible. Please note that no legally binding obligation will be created upon any person with respect to this proposal unless and until a mutually acceptable definitive amendment to the merger agreement has been entered into by the parties. We look forward to your response.