SEATTLE--(EON: Enhanced Online News)--Charles Frischer, James Sight and the Libby Frischer Family Partnership, LP believes the Board of Directors at Shengtai Pharmaceutical, Inc. has recently taken actions which are not in the best interest of all shareholders. We also believe that Mr. Liu's efforts to take the company private could be assisted if the current public shareholders provided a portion of the financing for this proposed transaction. The attached letter more fully outlines our objectives.
Attention: Board of Directors and Members of the Independent Committee
Re: Acquisition Proposals
As you know, Shengtai Pharmaceutical, Inc. (the “Company”) is a dynamic and valuable company. The Company's extensive assets and outstanding market position make it worth far in excess of $1.65 per share, despite the fact that Mr. Liu has recently withdrawn his offer for that amount.
James Sight and I have been shareholders for some time and we currently own a combined 430,803 shares of the company. James Sight owns 192,202 shares and I own 238,601 shares. Combined, we own 4.5% of the outstanding shares of the company and more than 7.4% of the Company’s outstanding shares not controlled by Mr. Liu.
As set forth in public disclosures on August 7, 2013, we understand that Mr. Liu withdrew his offer to acquire all the outstanding shares of common stock of the Company not currently owned by him and his affiliates in a going private transaction at a proposed price of $1.65 per share in cash. We also understand that Mr. Liu filed a Form 15 on August 30, 2013 certifying that there are only 45 holders of record of the Company’s common stock and terminating registration of the Company. As a result of these actions, the Company’s stock price has dropped precipitously. To put it mildly, the confluence of these events is disturbing.
It may not make sense for the Company to remain public; we are supportive of a privatization transaction, at a fair price and pursuant to a fair process. To the extent that the Board takes no action or supports actions by Mr. Liu to destroy shareholder value, we politely request a copy of your director and officer insurance policy.
In furtherance of my support for a fair privatization transaction, we would commit to support and vote in favor of a privatization transaction at $2.00 per share, payable in a combination of $1 per share in cash and a $1 per share note from the Company. The note could be payable over 5 years at a 7% interest rate. This proposal is an effort to assist Mr. Liu in his efforts to purchase 100% of the company’s shares. We understand that some sectors of the Chinese banking industry are in transition and our willingness to finance a portion of this transaction is our way of working together with Mr. Liu to help him accomplish his goals for the company.
We have full confidence that the Board will faithfully discharge its fiduciary duties. We look forward to working together towards a transaction (at a fair price and pursuant to a fair process) that will lead to the sale of the Company.
Feel free to contact me if we can be of further assistance. We would be willing to execute a lock up or support agreement to sell my shares on the terms discussed above.