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Car rental company eHi questions Ctrip consortium's revised takeover proposal

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Car rental company eHi questions Ctrip consortium's revised takeover proposal

Car rental company eHi Car Services Ltd. said July 2 that it questions the motives of Chinese travel booking company Ctrip.com International Ltd. and private equity firm Ocean Link Partners Ltd., which just raised their offer to take eHi private. But eHi said its independent directors will continue to evaluate the revised bid.

Ctrip and Ocean Link on June 29 raised their bid to $15.50 per American depositary share, or $7.75 in cash per common share, from a previous offer of $14.50 per ADS, or $7.25 in cash per common share.

eHi noted that the investors increased their bid the same day a Cayman Islands court dismissed a "winding up" petition filed by Ctrip. The petition would have prevented a group led by eHi founder, Chairman and CEO Ray Ruiping Zhang from taking the company private, according to eHi. Zhang and the group of investors on April 6 bid to take the company private for $6.75 per common share in cash consideration, or $13.50 per ADS.

"[The] decision to make this proposal immediately after the Court threw out Ctrip's frivolous lawsuit and censured its behavior calls into question the true motives of Ctrip and the Ctrip Consortium," eHi said. The Financial Services Division of the Grand Court of the Cayman Islands issued its statement June 29.

"The Special Committee continues to evaluate the revised proposal from the Ctrip Consortium, but as of this time has not determined that any proposal from the Ctrip Consortium is, or could reasonably be expected to result in, a superior proposal to the [Zhang proposal] in accordance with the requirements of the Merger Agreement," eHi said in its statement.