Mindray Medical (NYSE:MR) said today that its top executives lowered their offer to pay $3.5 billion to take the Chinese medical device company private.
Co-CEOs Li Xiting and Cheng Minghe and chairman Xu Hang offered $30 per share, or $3.5 billion, in early June. Today the trio lowered that bid to $27 per share, or $3.15 billion.
“Our decision to revise the offer price has been a difficult 1 to make, but is necessitated by the tougher-than-expected market conditions facing the company and the Chinese economy,” they wrote today in a letter to Mindray’s board, citing a -31.0% hit to the bottom line during the 2nd quarter and Mindray’s lowered outlook for the rest of year.
“We believe that such deterioration in the company’s business has had a significantly negative impact on the value of the company,” Li, Cheng and Xu wrote.
The syndicate is also having trouble raising the debt necessary to fund the buyout, they wrote. The strong dollar isn’t helping either, according to letter.
“We face great exposure to adverse movements in most emerging market currencies as these affect the purchasing power of our international customers. This, in turn, has a significant negative effect on the valuation of the company. Furthermore, our cost of funding associated with the financing for the acquisition rises with a stronger U.S. dollar,”they wrote.
Li, Cheng and Xu and entities they control collectively own some 63.7% of Mindray’s voting shares, according to regulatory filings.
MR shares were down -2.6% to $23.56 apiece today in mid-day trading.
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