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Noah Education Announces Receipt of Offer for Electronic Learning Product Business
Feb 25, 2011 (03:02 PM EST)
SHENZHEN, China, Feb. 25, 2011 /PRNewswire-Asia-FirstCall/ -- Noah Education Holdings Ltd. (NYSE: NED) ("Noah" or the "Company"), a leading provider of education products and services in China, today announced that the board of directors of the Company (the "Board") has received an indicative non-binding offer (the "Offer") from Mr. Benguo Tang, one of Noah's founders, to acquire Noah's Electronic Learning Product ("ELP") business and operating assets (excluding cash and the office building in Chengdu). In connection with the submission of the Offer, Mr. Tang has also resigned from his role as Noah's President and Chief Operating Officer ("COO") and the Board has appointed Mr. Ruchun Zhang as the interim President and COO of the Company, effective immediately.
Due to the increasing competition from more versatile mobile devices such as tablet computers and smart phones, the traditional ELP business has incurred losses during the past few quarters. In light of the fundamental changes in the market, disruptions to the Company's distribution network, and the Company's intention to focus more heavily on its education services business, Noah has considered various strategic alternatives for the ELP business in the past several months, including conducting a confidential solicitation of interest in acquiring the ELP business. In late 2010, the Company retained an independent financial advisor to assist it in soliciting and evaluating bids for the ELP business. However, no suitable bidder has emerged to date. On February 15, 2011, the Board established a special committee (the "Special Committee") to continue to evaluate the strategic alternatives relating to the ELP business, including, among others, the closure of the ELP business. The Special Committee consists of five members of the Board (i.e., Benzhong Wang, Shengli Zheng, Xiao Chen, Conrad Kwong Yue Tsang and Dong Xu), a majority of whom are independent directors.
Mr. Tang submitted the Offer to the Board on February 22, 2011. The Offer indicated a preliminary price range of RMB90 million to RMB120 million. In connection with the Offer, Mr. Tang has resigned from his role as Noah's President and COO, effective immediately, but will remain with the Company in the capacity of a non-executive director. Mr. Tang will refrain from attending any Board meetings discussing the Offer or the other alternatives for the ELP business. At a meeting of the Board on February 24, 2011, the Board authorized the Special Committee to evaluate the Offer and appointed Mr. Ruchun Zhang, Senior Vice President of the Company, as the Company's interim President and COO. While evaluating the proposal from Mr. Tang, the Special Committee is also authorized to solicit offers from other potential purchasers and will continue to assess other alternatives, including closure of the ELP business.
Commenting on the announcement, Mr. Xu Dong, Noah's Chairman and Chief Executive Officer, said, "After careful evaluation of the evolving market dynamics and our current positioning relative to our long-term goals, we have made the prudent decision to consider strategic alternatives for our ELP business. This decision will enable us to place increased focus on our education services business, more effectively pursue growth opportunities and, ultimately, deliver value to our shareholders. The Special Committee is dedicated to carefully evaluating both Mr. Tang's offer and other alternatives to ensure we pursue the avenue that has robust growth prospects while maintaining the financial health of our company. As we work through this transitional period, we are confident about our future opportunities within the education services space. In addition to the attractive margin and high visibility nature of the education services industry, this fast-growing market in China remains highly fragmented and underpenetrated. Our existing footprint in this space and strong balance sheet positions us well to capitalize on these robust opportunities and emerge as the clear market leader. Our current education services portfolio, including Little New Star and Wentai Education, has demonstrated impressive growth under the Noah umbrella and we look forward to leveraging this momentum in order to fuel growth and expand this business."
About Noah Education Holdings Ltd.
Noah is a leading provider of education products and services in China. The Company's core offering includes the development and marketing of interactive educational courseware content, electronic learning products (ELPs), software, as well as the provision of education services. Noah combines standardized educational content with innovative digital and multimedia technologies to create a dynamic learning experience and improve academic performance for children in China. The Company has developed a nationwide sales network, powerful brand image, and accessible and diverse delivery platforms to bring its innovative content to the student population. Noah offers education services in China via Shenzhen Wentai Education Industry Development Co., Ltd ("Wentai Education"), a company focused on early childhood, primary and secondary education services, as well as providing English language training for children under the brand Little New Star in its directly owned training centers and franchised training centers. Noah was founded in 2004 and is listed on the New York Stock Exchange under the ticker symbol NED. For more information about Noah, please visit http://www.noahedu.com.cn.
Safe Harbor Statement
This press release contains forward-looking statements that reflect Noah's current expectations and views of future events that involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Noah has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. You should understand that our actual future results may be materially different from and worse than what Noah expects. Information regarding these risks, uncertainties and other factors is included in Noah's most recent Annual Report on Form 20-F and other filings with the SEC.
SOURCE Noah Education Holdings Ltd.