Benzinga | Aug 10, 2020 07:42AM EDT

Phoenix New Media Enters Into a Share Purchase Agreement with Run Liang Tai Management

Phoenix New Media Limited ("Phoenix New Media," "ifeng" or the "Company") (NYSE:FENG), a leading new media company in China, today announced that it has entered into a new share purchase agreement (the "New SPA") with Run Liang Tai Management Limited ("Run Liang Tai"), which replaced the Company's previous agreement (the "Previous Agreement") with Run Liang Tai for the sale of the Company's investment in Particle Inc. ("Particle" or "Yidian") to Run Liang Tai and its designated entities (the "Proposed Buyers").

As previously announced by the Company, the Company has completed delivery of the first batch of Particle shares to the Proposed Buyers and received consideration of US$200 million for such shares as well as a further deposit of US$50 million pursuant the Previous Agreement, and the Proposed Buyers was required to pay the remaining purchase price for the second batch of Particle shares to the Company on or before August 10, 2020 under the Previous Agreement. The rights and obligations of both the Proposed Buyers and the Company with respect to the second batch of shares under the Previous Agreement were terminated pursuant to the New SPA, and instead, the Company agreed to sell a total of 140,248,775 shares of Particle, representing all of the Particle shares the Company currently holds, to the Proposed Buyers at a total purchase price of US$150 million. The Proposed Buyers has paid approximately US$99.3 million (the "Remaining Payment") to the Company under the New SPA, which represents the difference between the total purchase price and the US$50 million deposit already paid by the Proposed Buyers under the Previous Agreement plus certain other accrued interests. The Company will be required to deliver the 140,248,775 shares of Particle to the Proposed Buyers after certain closing conditions are satisfied.

As previously announced by the Company, the Company provided an interest-free loan of approximately US$9.7 million to the Proposed Buyers to enable them to pay for the first batch of shares that Long De Cheng Zhang (Tianjin) Investment Management Center and Long De Holdings (Hong Kong) Co., Limited (collectively, the "Long De Entities") sold to the Proposed Buyers pursuant to a co-sale agreement that the Company entered into with the Long De Entities and Run Liang Tai. Under the New SPA, the Proposed Buyers agreed to transfer 4,584,209 shares of Particle back to the Company in satisfaction of the Proposed Buyers' obligation to repay the US$9.7 million loan. The Proposed Buyers also agreed to purchase from any other shareholder of Particle such number of Particle shares that the shareholder may elect to sell pursuant to its co-sale right under the existing shareholders agreement of Particle (the "Additional Purchase Obligations").

Completion of the transaction contemplated in the New SPA (the "Proposed Transaction") is subject to certain closing conditions, including but not limited to approval by the shareholders of the Company's parent company, Phoenix Media Investment (Holdings) Limited ("Phoenix HK") (including any related necessary approval by The Stock Exchange of Hong Kong Limited), as well as the Proposed Buyers' provision of written evidence satisfactory to the Company showing that they have fulfilled any Additional Purchase Obligation. The Company may be required to return US$150 million to the Proposed Buyers and pay damages of US$50 million if it fails to obtain approval by the shareholders of Phoenix HK due to reasons within the Company's reasonable control. The Company may be able to retain some of the US$150 million if the Proposed Transaction fails to close due to other reasons. There is no assurance that the Proposed Transaction will ever be closed.