China Housing & Land Development – Going Private Transaction – 28% upside

Current Price – $2.34;

Offer Price – $3 (for holders of up to 50000 shares);

Upside – 28% (for holders of up 50000 shares);

Expiration date –  TBD (shareholder voting date still to be scheduled);

Important Note – This transaction is more risky than the standard odd lot tender that get published on this site and has higher probability of being cancelled. Company had a similar going private offer in 2014, which was eventually cancelled due to deteriorating China real estate market. At that time company was offering equivalent of $8.75/share, so three times more than the current offer. An argument could be made that this time the deal is more likely to go through, as per share cost of going private have decreased and less speculators will be pilling in to arbitrage this situation with a hindsight of last year. Thus, due your own diligence before taking position.

SEC Filling



This transaction will eliminate the significant expense required to comply with the reporting and related requirements of being a publicly traded company in the U.S. Often referred to as a “going private” transaction, the transaction (the “Transaction”) will consist of a reverse stock split of our Common Stock, whereby each 50,000 shares of the outstanding Common Stock will be converted into one whole share of our Common Stock (the “Reverse Stock Split”), and, in lieu of us issuing fractional shares to stockholders who would hold fractional shares as a result of the Reverse Stock Split, we will pay cash equal to US$3.00 (the “Cash Payment”) multiplied by the number of pre-Reverse Stock Split shares of Common Stock held by such stockholder underlying the corresponding fractional shares.


Shareholder approval:

Proposal is subject to shareholder approval (meeting date still to be scheduled). Insiders own 20% of the vote.


Source of Funds:

Based on estimates of the record ownership of our Common Stock, the number of shares of our Common Stock outstanding and other information as of August 12, 2015, and assuming that approximately 2,917,869 pre-Reverse Stock Split shares of our Common Stock are cancelled in the Reverse Stock Split, the Company estimates that the total funds required to consummate the Transaction will be approximately US$9.6 million. Approximately US$8.8 million of this amount will be used to pay the consideration to stockholders entitled to receive cash for their fractional shares in the Reverse Stock Split and approximately US$0.89 million will be used to pay the costs of the Transaction.

The Company expects to pay the costs of the Transaction, including the amounts to be paid to stockholders for their fractional shares, out of funds available (as of Q2 $6m in cash and $90m in restricted cash).



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