111 Announces Receipt of Withdrawal of Going Private Proposal

Rhea-AI Summary

111, Inc. (YI) receives notice of withdrawal of going private proposals from consortium led by company co-founders Dr. Gang Yu and Mr. Junling Liu. Consortium terminates negotiations with special committee.

Insights

Market Research Analyst

The withdrawal of the going private proposals by the consortium for 111, Inc. is a significant development that will likely impact the company's stock market performance. Investors often perceive going private as a sign that insiders believe the company is undervalued. The reversal of such a decision could indicate a change in the assessment of the company's future prospects or valuation challenges, potentially leading to volatility in the stock price.

It is essential to consider the context in which the proposals were made and subsequently withdrawn. The timing of the withdrawal coincides with a period of economic uncertainty and regulatory changes in China, particularly in the healthcare and technology sectors. Investors will be keen to understand the underlying reasons for the withdrawal, as it could reflect broader industry trends or company-specific issues.

Financial Analyst

The announcement of the withdrawal of the going private proposals may have immediate financial implications for 111, Inc. Typically, stocks tend to rise on the announcement of a going private transaction due to the premium usually offered over the market price. Conversely, the termination of such discussions could lead to a decline in share price as the market adjusts to the new reality.

Long-term implications will depend on the company's ability to communicate its future strategy and growth prospects to the market. The management's decision to remain public requires them to maintain transparency with shareholders and provide a clear roadmap for value creation. This incident may trigger a reevaluation of the company's corporate governance and strategic direction, which are critical factors for investor confidence.

Legal Expert

The formal termination of negotiations between the consortium and the special committee may have legal ramifications, particularly concerning disclosure obligations. The company must ensure compliance with NASDAQ regulations and securities laws regarding material changes in corporate strategy. This includes timely and accurate disclosure of the withdrawal of the going private proposals.

Additionally, the special committee's role in protecting minority shareholders' interests during such negotiations is crucial. The committee must ensure that all actions taken are in the best interest of all shareholders, not just the consortium. The termination of the proposals could lead to scrutiny of the committee's actions and decisions throughout the negotiation process.

SHANGHAI, Feb. 27, 2024 /PRNewswire/ -- 111, Inc. ("111" or the "Company") (NASDAQ: YI), a leading tech-enabled healthcare platform company committed to digitally connecting patients with medicine and healthcare services in China, today announced that it has received a notice dated Feburary 27, 2024 on behalf of the consortium comprising Dr. Gang Yu, co-founder and co-chairman of the Company, Mr. Junling Liu, co-founder, co-chairman and chief executive officer of the Company and certain other investors (collectively, the "Consortium"), stating that the Consortium would withdraw its preliminary non-binding going private proposal dated September 9, 2022 and preliminary non-binding going private proposal dated October 29, 2022 (collectively, the "Proposals"). The Consortium will formally terminate further negotiation with the special committee of the Company's board of directors regarding the transactions as contemplated by the Proposals.

Forward-Looking Statements

This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "confident" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as 111's strategic and operational plans, contain forward-looking statements. 111 may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control. Forward-looking statements involve inherent risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to the Company's ability comply with extensive and evolving regulatory requirements, its ability to compete effectively in the evolving PRC general health and wellness market, its ability to manage the growth of its business and expansion plans, its ability to achieve or maintain profitability in the future, its ability to control the risks associated with its pharmaceutical retail and wholesale businesses, and the Company's ability to meet the standards necessary to maintain listing of its ADSs on the Nasdaq Global Market, including its ability to cure any non-compliance with Nasdaq's continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and 111 does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

About 111, Inc.

111, Inc. (NASDAQ: YI) ("111" or the "Company") is a leading tech-enabled healthcare platform company committed to digitally connecting patients with medicine and healthcare services in China. The Company provides consumers with better access to pharmaceutical products and healthcare services directly through its online retail pharmacy, 1 Pharmacy, and indirectly through its offline virtual pharmacy network. The Company also offers online healthcare services through its internet hospital, 1 Clinic, which provides consumers with cost-effective and convenient online consultation, electronic prescription service, and patient management service. In addition, the Company's online platform, 1 Medicine, serves as a one-stop shop for pharmacies to source a vast selection of pharmaceutical products. With the largest virtual pharmacy network in China, 111 enables offline pharmacies to better serve their customers with cloud-based services. 111 also provides an omni-channel drug commercialization platform to its strategic partners, which includes services such as digital marketing, patient education, data analytics, and pricing monitoring.

For more information on 111, please visit: http://ir.111.com.cn/.

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SOURCE 111, Inc.

FAQ

What is the latest announcement from 111, Inc. (YI)?

111, Inc. (YI) received a notice from a consortium led by company co-founders Dr. Gang Yu and Mr. Junling Liu, stating the withdrawal of their going private proposals.

Who are the key members of the consortium mentioned in the announcement?

The consortium comprises Dr. Gang Yu, co-founder and co-chairman of the Company, Mr. Junling Liu, co-founder, co-chairman, and chief executive officer of the Company, and certain other investors.

What were the proposals that the Consortium withdrew?

The Consortium withdrew its preliminary non-binding going private proposal dated September 9, 2022, and preliminary non-binding going private proposal dated October 29, 2022.

What is the outcome of the withdrawal of the proposals?

The Consortium will formally terminate further negotiation with the special committee of the Company's board of directors regarding the transactions as contemplated by the Proposals.