March 13, 2020
Via E-mail
Z. Julie Gao, Esq.
Skadden, Arps, Slate, Meagher & Flom
c/o 42/F, Edinburgh Tower, The Landmark
15 Queen's Road Central
Hong Kong
Re: Jumei International Holding Limited
Schedule 13E-3 filed February 26, 2020
Filed by Jumei International Holding Limited
File No. 005-88610
Schedule TO-T Filed February 26, 2020
Schedule TO-C Filed February 25, 2020
Filed by Jumei Investment Holding Limited, Super ROI Global
Holding
Limited, and Leo Ou Chen
File No. 005-88610
Dear Ms. Gao:
The staff in the Office of Mergers and Acquisitions has reviewed your
filings. We have
the comments set forth below. In some of our comments, we may ask you to
provide us with
information so we may better understand your disclosure.
Please respond to this letter by amending your filings, by providing the
requested
information, or by advising us when you will provide the requested response. If
you do not
believe our comments apply to your facts and circumstances or do not believe an
amendment is
appropriate, please tell us why in your response.
After reviewing any amendments to your filings and the information you
provide in
response to these comments, we may have additional comments.
Schedule 13E-3
General
1. We note that members of the Offeror Group are not named as filing persons.
We also note
that Mr. Leo Ou Chen is the ultimate beneficial owner of Parent and
Purchaser, and is the
controlling shareholder of the Company. Please provide us with your analysis
as to why
Jumei Investment Holding Limited, Super ROI Global Holding Limited, and Mr.
Chen are
Z. Julie Gao, Esq.
Skadden, Arps, Slate, Meagher & Flom
March 13, 2020
Page 2
not named as filing persons. Alternatively, revise to include them as filers
on the Schedule
13E-3 and ensure that all of the disclosure required by that Schedule is
provided as to them
individually, to the extent not already included.
2. We note your disclosure that between January 2 January 10, 2020, Mr. Chen
participated in
discussions with his advisors regarding acquiring all Class A Ordinary
Shares not already
owned by him and his affiliates. These discussions, according to your
disclosure, included a
summary analysis of steps, legal requirements and an estimated timeline for
a transaction.
Given that these discussions began on January 2, 2020, explain in your
response letter why
Mr. Chen and his affiliates did not file a Schedule 13D amendment until his
take-private
proposal was submitted to Jumei on January 11, 2020.
3. We note that Parent, Purchaser, and Mr. Chen filed an amended Schedule 13D
but do not
disclose that they became a member of a group. Given their joint filing
agreement and their
status as offerors for the tender offer, please provide your analysis as to
why they are not
members of a beneficial ownership group. Refer to Rule 13d-5(b).
Alternatively, file an
amended Schedule 13D reflecting group status.
Schedule TO-T Exhibit (a)(1)(i) Offer to Purchase for Cash
4. We note that tendering ADS holders whose securities are purchased in the
offer will receive
the offer consideration, less the ADS cancellation fee and the ADS
depositary service fee. In
your response letter, provide your analysis as to how this complies with the
best-price
provisions of Rule 14d-10.
Purpose of and Reasons for the Offer; Plans for Jumei After the Offer and the
Merger, page 10
5. Your disclosure of the purpose of the proposed transaction appears to have
been generally
applicable at any time during the Company's history. Therefore, please
revise to state why
Parent is pursuing this transaction now as opposed to at any other time.
6. Parent states its belief that one of the anticipated benefits that would
follow from Jumei being
a privately held company includes the elimination of burdens such as
"preparing periodic
reports under federal securities laws and the costs of maintaining investor
relations staff and
resources and complying with the Sarbanes-Oxley Act of 2002." Please
quantify the
estimated annual compliance cost savings, to the extent practicable, and
state that such
savings will be realized on an annual, recurring basis. Refer to Instruction
2 to Item 1013(d)
of Regulation M-A.
Position of the Offeror Group Regarding Fairness of the Offer and Merger, page
12
7. Expand your discussion of the factors upon which the fairness determination
is based to
address factors such as historical market prices, net book value, and future
prospects of the
Company. Refer to Instruction 2 to Item 1014 of Regulation M-A.
Z. Julie Gao, Esq.
Skadden, Arps, Slate, Meagher & Flom
March 13, 2020
Page 3
8. Affirmatively state whether or not the transaction has been structured so
that approval of at
least a majority of unaffiliated security holders would be required. Refer
to Item 1014(c).
9. Provide the disclosures required by subsections (d) and (e) of Item 1014.
10. We note that the Offeror Group lists as a factor the fairness opinion
received by the Special
Committee from its financial advisor. Note that if any filing person has
based its fairness
determination on the analysis of factors undertaken by others, such person
must expressly
adopt such analysis as their own in order to satisfy their disclosure
obligation. Refer to
Question 20 of Exchange Act Release No. 34-17719 (April 13, 1981).
Accordingly, please
revise to state, if true, that the Offeror Group has adopted Holihan
Lokey's analysis as its
own.
11. Address whether the Offeror Group considered as a factor the required
termination fee to be
paid by the Company to Parent in the event the Merger Agreement is
terminated.
Source and Amount of Funds, page 39
12. We note reference to "other sources of immediately available funds
available to Purchaser
and Parent." Disclose the nature of these sources and quantify how much you
anticipate
drawing from these sources for the offer.
13. You disclose that Jumei and its subsidiaries hold approximately $49 million
cash in RMB in
bank accounts in China, which will be exchanged into U.S. dollars "using
the foreign
exchange quota available to it and through other means permitted under
applicable law."
Given the various foreign exchange control restrictions under PRC law,
please quantify the
amount of these funds that Purchaser anticipates will be readily available
for use in
connection with this offer. To the extent that there is a risk these funds
will not be available
when needed due to exchange controls, please discuss where appropriate.
14. Confirm that you will file the definitive loan agreement for the debt
financing commitment as
an exhibit to the Schedule TO once it is available. Refer to Item 1016(b)
of Regulation M-A.
Conditions to the Offer, page 41
15. We note that the Offer is conditioned on Purchaser acquiring minimum
financing. Given that
the Offer will be financed through a combination of cash on hand, various
lines of credit, and
a third party debt financing (which is itself subject to the satisfaction
of certain conditions),
please provide additional details regarding the operation of this
condition, such that
shareholders may ascertain when the offer will be considered fully
financed.
16. Refer to our prior comment above. Generally, when an offer is conditioned
on the ability of
a party to obtain financing, a material change will occur in the
information previously
Z. Julie Gao, Esq.
Skadden, Arps, Slate, Meagher & Flom
March 13, 2020
Page 4
disclosed when the offer becomes fully financed. Confirm that you will
promptly file an
amendment to the Schedule TO and disseminate disclosure of such a material
change.
17. You state that the Offer conditions may be waived by Purchaser "in its sole
discretion, in
whole or in part, at any time." This suggests that Purchaser may become
aware that an offer
condition has been triggered yet the tender offer may proceed without new
disclosure. To the
extent you become aware of any offer condition becoming operative in a way
that would
enable Purchaser to terminate the offer or cancel the obligation to accept
tenders, and
Purchaser elects to proceed with the offer anyway, we view that decision as
a waiver of the
condition. If a material condition is waived, a material change has
occurred to the offer
document within the meaning of Rule 14d-6(c). Please revise this section to
qualify the
referenced disclosure by affirming Purchaser's understanding of its
obligation to disclose
material changes.
18. Condition (vi) to the offer requires that Jumei shall have performed or
complied in all
material respect with all agreements or obligations required to be
performed or complied
with by it under the Merger Agreement. Given that Jumei is the Schedule
13E-3 filing
person and is controlled by Mr. Chen, we are concerned that this condition
could render the
offer illusory, in contravention of Section 14(e), since the condition
appears to be within the
control of Purchaser and its affiliates. Please revise this condition or
provide us with your
analysis supplementally if you do not agree.
19. With respect to condition (viii), please amend the Offer materials to
advise whether the effect
of the current virus outbreak and its potential negative impact on the
operation of Jumei and
its business partners constitutes a "material adverse effect," triggering
this condition, and if
so, whether or not you are waiving that condition.
Schedule TO-C filed February 25, 2020
Safe Harbor Statement
20. The safe harbor provisions in the Private Securities Litigation Reform Act
of 1995 are, by
their terms, not available for statements made in connection with a tender
offer. See
Securities Act Section 27A(b)(2)(C) and Securities Exchange Act Section
21E(b)(2)(C).
Please refrain from making further references to the Act or its safe harbor
provisions in any
future press releases or other communications relating to the offer or
future offers. For
guidance, refer to Section I.M, Q & A No. 2, in the Manual of Publicly
Available Telephone
Interpretations, Third Supplement, July 2001.
* * *
Z. Julie Gao, Esq.
Skadden, Arps, Slate, Meagher & Flom
March 13, 2020
Page 5
We remind you that the filing persons are responsible for the accuracy
and adequacy of
their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
Please direct any questions to me at (202) 551-7951. You may also
contact Tina Chalk,
Senior Special Counsel, at (202) 551-3263.
Sincerely,
/s/ Joshua Shainess
Joshua Shainess
Special Counsel
Office of Mergers
and Acquisitions