SINA and China Dongxiang Enter Agreements to Acquire Shares of Mecox Lane and Memorandums of Understanding for Strategic Cooperation
(2 March 2011, Hong Kong) - Mecox Lane Limited ("Mecox Lane" or the "Company") (NASDAQ: MCOX), which operates one of China's leading online platforms for apparel and accessories, today announced that SINA Corporation ("SINA") (NASDAQ GS: SINA) and a subsidiary of China Dongxiang (Group) Co., Ltd. ("China Dongxiang") (HKEx: 3818) entered separate agreements to acquire an aggregate of 117,505,755 ordinary shares (equivalent to 16,786,535 ADSs) of Mecox Lane from two major shareholders of Mecox Lane, Maxpro Holdings Limited and Ever Keen Holdings Limited, both wholly owned by Sequoia Capital (collectively "Sequoia"). Each of Mecox Lane's ADSs trading on the NASDAQ Global Market represents 7 ordinary shares.
Under the share purchase agreements, SINA will purchase 76,986,529 ordinary shares (equivalent to 10,998,075 ADSs), or approximately 19% of the issued and outstanding shares of Mecox Lane, and China Dongxiang will purchase 40,519,225 ordinary shares (equivalent to 5,788,460 ADSs), or approximately 10% of the issued and outstanding shares of Mecox Lane (collectively, the "Sale Shares"). The purchase price is US$0.8571 per share, equivalent to US$6.00 per ADS. The selling shareholders also agreed to grant SINA and China Dongxiang options to purchase 48,254,173 ordinary shares (equivalent to 6,893,453 ADSs) and 18,306,117 ordinary shares (equivalent to 2,615,159 ADSs) of Mecox Lane, respectively. The options are exercisable during a two-year period starting from the closing date of the above share purchases and the exercise price is US$1.1429 per ordinary share, equivalent to US$8.00 per ADS.
Upon the closing of share purchases, a representative from SINA will be appointed as a director of Mecox Lane and Mr. Kelvin Yu, a vice president with Sequoia will resign from the board. Each of SINA and Dongxiang will be subject to a one-year lock-up with respect to the Sale Shares, starting from the closing date of the share purchases. Sequoia will also be subject to 180-day lock-ups starting from the closing date of the share purchases, for their respective remaining shares in Mecox Lane.
"We believe that the strategic partnerships with SINA and China Dongxiang will help expedite the pace for us to become a leading online fashion shopping mall in China," said Mr. Alfred Gu, Mecox Lane's Director and Chief Executive Officer. "We plan to work with SINA to explore new forms of online marketing and treat each other as most-favored business partner in the cooperation of online advertising products and services. We and China Dongxiang intend to work together to launch the online platform sub-channel created solely for sportswear in m18.com as well as to develop a new line of basic style apparel and accessories." added Mr. Gu.
"We are very pleased that SINA and China Dongxiang become strategic shareholders of the company and would continue to support management in executing their business plan and strategies", commented Neil Shen, Chairman of the Board of Directors of Mecox Lane and Managing Partner of Sequoia Capital China.
"We are excited to enter China's e-commerce space starting with our investment in Mecox Lane," stated Charles Chao, Chief Executive Officer of SINA. "We believe our strategic investment in Mecox Lane will enhance the Company's online marketing capability and strengthen the Company's e-commerce platform for apparel and accessories."
"China Dongxiang is very glad to sign this transaction", commented Mr. Chen Yihong, Chairman of China Dongxiang. "China Dongxiang's highly recognized brands in sportswear sector and Mecox Lane's 'plug-and-play' online platform will create a solid foundation for us to tap into the growing online sportswear market in China. We believe both China Dongxiang and Mecox will benefit from increased collaboration, cooperation and interaction in our business activities."
About China Dongxiang (Group) Co. Ltd.
China Dongxiang (Group) Co., Ltd. (HKEx: 3818)s a leading international sportswear brand enterprise in China and was successfully listed on the Main Board of the Hong Kong Stock Exchange on 10 October 2007. The Group is primarily engaged in the design, development, marketing and wholesale of branded sportswear in China. Currently, China Dongxiang owns all rights to the internationally recognized Kappa and Robe Di Kappa (RDK) Brand in China, Macau and Japan. Its products convey an active, fashionable and youthful image and are warmly welcomed by China's fast growing and high potential consumers. The Group completed the acquisition of a Japan sportswear enterprise Phenix on 1 May 2008. Phenix, the most popular ski brand in Japan with the largest market share, has gained strong recognition in the international market.
About SINA Corporation
SINA Corporation (NASDAQ GS: SINA) is a leading online media company and mobile value-added service provider for China and for the global Chinese communities. With a branded network of localized websites targeting Greater China and overseas Chinese, the Company provides services through five major business lines including www.SINA.com (online news and content), SINA Mobile (MVAS), SINA Community (Web 2.0-based services and games), SINA.net (search and enterprise services) and SINA E-Commerce (online shopping). Together these business lines provide an array of services, including region-focused online portals, MVAS, social networking service (SNS), blog, audio and video streaming, album, online games, email, search, classified listings, fee-based services, e-commerce and enterprise e-solutions. The Company generates the majority of its revenues from online advertising and MVAS offerings, and, to a lesser extent, from search and other fee-based services.
About Mecox Lane Limited
Mecox Lane Limited (NASDAQ: MCOX) operates China's leading online platform for apparel and accessories. It offers offer a wide selection of fashion products including apparel and accessories, home products, beauty and healthcare products and pet accessories through its www.M18.com ecommerce website and physical store network. Product offerings include apparel and accessories, home products, beauty and healthcare products and other products, under the Company's own proprietary brands, such as Euromoda and Rampage, as well as under selected third-party brands, including established international and Chinese brands in addition to independent and emerging brands.