Sec Form 13D Filing - Wang Sizhen filing for GENETRON HLDGS LTD ADS (GTH) - 2023-10-20

Pursuant to an agreement and plan of merger, dated as of October 11, 2023, (the “Merger Agreement”), among New Genetron Holding Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands (“Parent”), Genetron New Co Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands and a wholly-owned subsidiary of Parent (“Merger Sub”), and the Company, Merger Sub will be merged with and into the Company, with the Company continuing as the surviving company and a wholly owned subsidiary of Parent (the “Merger”).

It is anticipated that approximately US$50.9 million will be expended in acquiring the outstanding ordinary shares other than the Rollover Shares (as defined below) pursuant to the Merger Agreement. The Merger will be funded through cash contribution by Wealth  Strategy Holding Limited, Surrich International Company Limited, Tianjin Kangyue Business Management Partnership (Limited Partnership), CICC Healthcare Investment Fund. L.P., CCB (Beijing) Investment Fund Management Co., Ltd. and Wuxi Huihongyingkang Investment Partnership (Limited Partnership) or their respective affiliates (each a “Sponsor” and collectively the “Sponsors”). Parent has entered into certain equity commitment letters with the Sponsors, each dated October 11, 2023 (the “Equity Commitment Letters”), pursuant to which the Sponsors have agreed, subject to the terms and conditions thereof, to provide the financing amounts, up to US$52.4 million, for the purpose of financing the Merger consideration and certain other expenses in connection with the Merger. Each of the Reporting Persons and certain other

shareholders of the Company has agreed to roll over certain ordinary shares (including ordinary shares represented by ADS) he, she or it beneficially owns (the “Rollover Shares,” and the holder thereof, “Rollover Shareholders”) in connection with the Merger in accordance with the terms and conditions of the relevant rollover and support agreement entered into with Parent dated October 11, 2023 (the “Support Agreement”).

The descriptions of the Merger, the Merger Agreement, the Equity Commitment Letters and the Support Agreement set forth in Item 4 below are incorporated by reference in their entirety into this Item 3.

On August 21, 2022, Mr. Sizhen Wang submitted a non-binding proposal (the “Proposal”) to the Company’s board of directors related to the proposed acquisition of all of the ordinary shares, including ordinary shares represented by ADS, not beneficially owned by him or any of his affiliates for cash consideration equal to US$0.272 per ordinary share or US$1.36 per ADS (the “Proposed Transaction”).

On October 11, 2023, the Company entered into the Merger Agreement with Parent and Merger Sub. Pursuant to the Merger Agreement, Merger Sub will be merged with and into the Company, with the Company continuing as the surviving company and a wholly owned subsidiary of Parent. At the effective time of the Merger (the “Effective Time”), each ordinary share and each ADS issued and outstanding immediately prior to the Effective Time will be cancelled and cease to exist in exchange for the right to receive US$0.272 per ordinary share or US$1.36 per ADS (less applicable fees, charges and expenses payable by ADS holders pursuant to the depositary agreement, dated June 18, 2020, entered into by and among the Company, the Bank of New York Mellon (the “Depositary”) and all holders and beneficial owners of ADSs issued thereunder), in each case, in cash, without interest and net of any applicable withholding taxes, except for (a) the Rollover Shares, which will be cancelled without payment of any cash consideration therefor, (b) ordinary shares (including ordinary shares represented by ADSs) owned by Parent, Merger Sub or the Company or any of their subsidiaries or held in the Company’s treasury, which will be cancelled without payment of any consideration therefor, (c) ordinary shares (including ordinary shares represented by ADSs) recorded under the name of the Depositary as a member in the register of members of the Company and reserved for issuance and allocation pursuant to the Company share incentive plans, which will be cancelled without payment of any consideration therefor (such ordinary shares set forth in (a), (b) and (c), the “Excluded Shares”), and (d) ordinary shares that are issued and outstanding immediately prior to the Effective Time and that are held by shareholders of the Company who shall have validly exercised and not effectively withdrawn or lost their rights to dissent from the Merger in accordance with Section 238 of the Companies Act (as amended) of the Cayman Islands (the “Dissenting Shares”), which will be cancelled at the Effective Time and will entitle the holders thereof to receive the payment of the fair value of such Dissenting Shares held by them determined in accordance with the provisions of Section 238 of the Companies Act (as amended) of the Cayman Islands.

On October 11, 2023, the Company announced a change of the ratio of its ADS to ordinary shares from one (1) ADS representing five (5) ordinary shares to one (1) ADS representing fifteen (15) ordinary shares on or about October 26, 2023. Assuming the completion of such change of ratio, the holder of ADSs (other than the Excluded Shares) shall be entitled to receive US$4.08 in cash per ADS (less applicable fees, charges and expenses payable by ADS holders pursuant to the depositary agreement), without interest and net of any applicable withholding taxes.

The consummation of the Merger is subject to the satisfaction or waiver of a number of conditions set forth in the Merger Agreement, including (i) the approval of the Merger by the affirmative vote of holders of ordinary shares (including ordinary shares represented by ADSs) representing at least two-thirds of the voting power of the outstanding ordinary shares present and voting in person or by proxy as a single class at the shareholders meeting of the Company or any adjournment or postponement thereof, (ii) the aggregate amount of Dissenting Shares shall be less than 15% of the total outstanding ordinary shares immediately prior to the Effective Time, and (iii) certain regulatory approvals. The Merger Agreement may be terminated by the Company or Parent under certain circumstances.

The purpose of the transactions contemplated under the Merger Agreement, including the Merger, is to acquire all of the outstanding ordinary shares other than the Excluded Shares. If the Merger is completed, the Company will become a wholly owned subsidiary of Parent and Company’s ADSs would become eligible for termination of registration pursuant to Section 12(g)(4) of the Act and would be delisted from the NASDAQ Global Market.

Concurrently with the execution of the Merger Agreement, each of the Reporting Persons and other Rollover Shareholders entered into the Support Agreement with Parent, dated as of October 11, 2023, pursuant to which, among other things and subject to the terms and conditions set forth therein, each of the Reporting Persons has agreed to (A) vote all Rollover Shares (together with any other ordinary shares or equity securities of the Company acquired, whether beneficially or of record, by such Reporting Person after the date thereof and prior to the Effective Time, including any ordinary shares acquired by means of purchase, dividend or distribution, or issued upon the exercise or vesting of any award under any Company share incentive plan, or any other options or warrants, or the conversion of any convertible securities or otherwise) held directly or indirectly by him or it in favor of the authorization and approval of Merger Agreement and transactions contemplated thereunder, and (B) upon

the terms and subject to the conditions of the Support Agreement, cancel the Rollover Shares beneficially owned by him or it and receive no cash consideration for cancellation of the Rollover Shares in accordance with the Merger Agreement in exchange for newly issued shares in Parent.

Concurrently with the execution of the Merger Agreement, the Sponsors entered into certain Equity Commitment Letters, pursuant to which the Sponsors will provide or cause to be provided, subject to the terms and on the conditions set forth therein, equity financing to Parent in an amount up to US$52.4 million in connection with the Merger.

After the Effective Time, Parent will be beneficially owned by the Reporting Persons, Sponsors and other Rollover Shareholders.

Concurrently with the execution of the Merger Agreement, Mr. Sizhen Wang and the Sponsors entered into an interim investor agreement (the “Interim Investor Agreement”), pursuant to which the parties thereto agreed to certain terms and conditions that will govern the actions of such parties and the relationship among such parties with respect to the Merger.

The information disclosed in this Item 4 does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, the Support Agreement, and the Interim Investor Agreement, copies of which are attached hereto as Exhibits B, C and D respectively, and which are incorporated herein by reference in their entirety.

Except as indicated above, the Reporting Persons have no plans or proposals which relate to or would result in any of the actions specified in paragraphs (a) through (j) of Item 4 of Schedule 13D. The Reporting Persons may, at any time and from time to time, formulate other purposes, plans or proposals regarding the Company, or any other actions that could involve one or more of the types of transactions or have one or more of the results described in paragraphs (a) through (j) of Item 4 of Schedule 13D.

As a result of entering into the Support Agreement and the Interim Investor Agreement, the Reporting Persons may be deemed to be members of a “group” with the other Rollover Shareholders pursuant to Section 13(d) of the Exchange Act. However, each Reporting Person expressly disclaims beneficial ownership of the ordinary shares (including ordinary shares represented by ADSs) beneficially owned (or deemed to be beneficially owned) by any of the other Rollover Shareholders. Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission that any of the Reporting Persons beneficially owns any ordinary shares (including ordinary shares represented by ADSs) that are beneficially owned (or deemed to be beneficially owned) by any of the other Rollover Shareholders. The Reporting Persons are only responsible for the information contained in this Schedule 13D and assume no responsibility for information contained in any other Schedules 13D filed by any of the other Rollover Shareholders.