WoWo Limited has signed a merger agreement with Join Me Group (HK) Investment Company Limited to form a restaurant and hotel Internet group named JM WOWO, which is headquartered in Hong Kong.
Under the agreement, WoWo will issue 741,422,780 ordinary shares and pay USD30 million in cash to JMU shareholders. In return, the company will gain all the issued and outstanding shares of JMU from its shareholders. At the same time, WoWo will issue 72,000,000 ordinary shares to its chairman Xu Maodong at the price of the equivalent of USD10 per ADS, for a total purchase price of USD40 million. On the completion of the transaction, JMU will become a subsidiary of JM WOWO and the current shareholders of JMU will hold 50% of all the issued and outstanding shares of JM WOWO.
In addition, Xu, who will hold 25.26% of all the issued and outstanding ordinary shares of JM WOWO, will become the largest shareholder of the combined company; Zhu Xiaoxia, JMU's co-founder and chairman, will hold 14.68% of the shares; and Wang Huimin, JMU's co-founder, will hold 10.06% of the shares.
The company will adopt a co-chairman and co-CEO mechanism. WoWo chairman Xu will be co-chairman of JM WOWO, WoWo executive president Wu Jianguang will be co-CEO of JM WOWO, and JMU chairman and CEO Zhu will be co-chairman and co-CEO of JM WOWO.
WoWo Limited operates China's leading e-commerce platform on both 55.com and mobile applications. It focuses on local entertainment and lifestyle services such as restaurants, movie theaters, and beauty salons. By December 31, 2014, the company had 36 million subscribers and 19.6 million activated WoWo Mobile App installed on mobile devices.
JMU is one of the largest B2B procurement platforms for the foodservice industry in China. The company has built cooperative relationship with hundreds of leading catering and hotel brands across the country.
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