Because the Sohu Group owns over 90% of the voting power represented by all issued and outstanding shares of Changyou, the Merger will be in the form of a short-form merger of Merger Co. with and into Changyou in accordance with section 233(7) of the Companies Law of the Cayman Islands, with Changyou being the company surviving the Merger. Shareholder approval of the Merger Agreement and the Merger by Changyou’s shareholders is not required.
The Merger is currently expected to close in the second quarter of 2020. If completed, the Merger will result in Changyou becoming aprivately-owned company wholly owned directly and indirectly by Sohu, Changyou ADSs no longer being listed on the Nasdaq Global Select Market, and Changyou’s ADS program being terminated.
China Renaissance through its subsidiaryCRP-Fanya Investment Consultants (Beijing) Limited is serving as financial advisor to the Sohu Group; Goulston & Storrs PC is serving as U.S. legal counsel to the Sohu Group; and Han Kun Law Offices is serving as PRC legal counsel to the Sohu Group.
Houlihan Lokey (China) Limited is serving as financial advisor to a committee of independent and disinterested directors established by the Changyou Board (the “Changyou Special Committee”); Skadden, Arps, Slate, Meagher & Flom LLP is serving as U.S. legal counsel to the Changyou Special Committee.
The validity of the Merger and certain other legal matters with respect to the Cayman Islands law are passed upon and advised by Conyers Dill & Pearman.
Additional Information About the Merger
The Company will furnish to the U.S. Securities and Exchange Commission (the “SEC”) a current report on Form6-K regarding the Merger, which will include as an exhibit thereto the Merger Agreement. All parties desiring details regarding the Merger are urged to review these documents, which will be available at the SEC’s website (http://www.sec.gov).
In connection with the Merger, Changyou and the Sohu Group will prepare and file with the SEC a Schedule13E-3 Transaction Statement (the “Schedule13E-3”). Investors in Sohu and other interested persons, as well as Changyou’s shareholders and ADS holders, will be able to obtain these documents, as well as other filings containing information about Changyou, Sohu, the Merger, and related matters, without charge from the SEC’s website (http://www.sec.gov) or at the SEC’s public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549.
Safe Harbor Statement
This announcement includes statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those referred to in any such forward-looking statements because of risks and uncertainties, including the possibility that the Merger will not occur as planned if events arise that result in the termination of the Merger Agreement, if the expected financing for the Merger is not available for any reason, or if one or more of the various closing conditions to the Merger are not satisfied or waived, and other risks and uncertainties regarding the Merger Agreement and the Merger that will be discussed in the Schedule13E-3 to be filed with the SEC.
