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ShangPharma Announces Intent to Go Private

Issued: July 01 2012

ShangPharma Corporation, a leading China-based pharmaceutical and biotechnology research and development outsourcing company, has announced that its Board of Directors has received a non-binding proposal letter dated July 6, 2012, from its Chairman and Chief Executive Officer, Michael Xin Hui, and entities affiliated with him (the founder), and TPG Star Charisma Limited and its affiliates (TPG) to acquire all of the outstanding shares of ShangPharma not currently owned by the founder or

TPG in a going-private transaction for between US$8.50 and US$9.50 per American Depositary Share (ADS, each ADS representing 18 ordinary shares of the Company) in cash, subject to certain conditions.
The founder and TPG currently own approximately 54% and 11% of ShangPharma’s ordinary shares, respectively, according to a company statement. According to the proposal letter, the acquisition is intended to be financed through a combination of debt and equity capital, with definitive
commitments for the required debt and equity funding expected to be in place, subject to the terms and conditions set forth therein, when the definitive agreements with respect to the acquisition and related transactions are signed.
ShangPharma’s Board of Directors has formed a special committee of independent directors consisting of three independent directors, Julian Ralph Worley, Yuk Lam Lo and Benson Tsang, to consider this proposal. The independent committee will retain a financial advisor and legal counsel to assist it in its work. The Board of Directors cautions the Company’s shareholders and others considering trading in its securities that the Board just received the non-binding proposal from Founder and TPG and no decisions have been made by the Independent Committee with respect to ShangPharma’s response to the proposal. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated.
Ropes & Gray partners Scott Jalowayski and Paul Boltz (Hong Kong) and Julie Jones (Boston) are
representing the consortium in the transaction.


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