Shenzhen Stock Exchange Code: 000562
Stock Abbreviation: Hongyuan Securities
Announcement Number: Lin 2014-104
Hongyuan Securities Co., Ltd. Announcement on the Distribution and Implementation of Cash Options for the Absorption Merger by Shenwan Hongyuan Securities Co., Ltd.
The company and all members of the board guarantee that the content disclosed in this announcement is true, accurate, and complete, with no false records, misleading statements, or significant omissions.
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The plan for Shenwan Hongyuan Securities Co., Ltd. to absorb and merge Hongyuan Securities Co., Ltd. through share exchange has been approved by Hongyuan Securities at the first extraordinary general meeting of shareholders held on August 11, 2014, and has received approval from the China Securities Regulatory Commission (CSRC) under approval number [2014] 1279.
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The company's stock (stock code: 000562) will be continuously suspended from trading starting December 10, 2014. Subsequently, Hongyuan Securities' stock will enter the cash option distribution, exercise declaration, and settlement phase, and will no longer be traded until it is converted into Shenwan Hongyuan stock and listed on the Shenzhen Stock Exchange.
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The company plans to distribute cash options to dissenting shareholders of Hongyuan Securities on the cash option distribution date, December 11, 2014. Dissenting shareholders are those who voted against the merger proposal at the extraordinary general meeting on August 11, 2014, and have continuously held shares representing that dissenting right until the cash option registration date (December 9, 2014). Such dissenting shareholders must successfully complete the declaration process during the cash option declaration period to exercise their cash options.
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As of the cash option registration date, if dissenting shareholders of Hongyuan Securities have submitted their shares as collateral for margin trading, the corresponding cash options will be distributed to the investors' ordinary securities accounts on the cash option distribution date.
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Dissenting shareholders who have engaged in repurchase agreements must complete the early repurchase procedures before the close of trading on the cash option registration date; otherwise, they will not receive cash options.
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After the cash option distribution is completed, the declaration process will commence. Shareholders who receive cash options can declare to exercise their options between December 12, 2014, and December 18, 2014, during the specified hours at a price of 8.12 yuan per share, transferring their shares to the cash option provider, Central Huijin Investment Ltd.
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The reference stock price for the cash options is 23.18 yuan (the closing price on December 4, 2014, the sixth trading day before the cash option declaration), with a premium of 185.47% over the exercise price, which exceeds 50%. According to the "Guidelines for Cash Option Business of Listed Companies on the Shenzhen Stock Exchange (Revised 2011)," the company will implement the cash options through manual declaration.
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According to the merger plan, the exercise price is based on the closing price of 8.22 yuan per share on the trading day before the announcement of the board resolution for the merger, adjusted to 8.12 yuan per share after deducting the profit distribution completed on July 17, 2014. As of December 8, 2014, the closing price of Hongyuan Securities was 28.05 yuan per share, representing a premium of 245.44% over the cash option exercise price. Exercising cash options may result in certain losses; investors are advised to be aware of investment risks.