111 Inc. has established a special committee of three independent directors to review a preliminary, non-binding proposal to take the Nasdaq-listed Chinese healthcare company private and to consider other strategic alternatives.
The committee consists of Jian Sun, who will serve as chairman, Nee Chuan Teo and Jun Luo, according to a Sept. 28 filing with the U.S. Securities and Exchange Commission. The board created the committee to evaluate a proposal dated Sept. 16 from co-founders Gang Yu and Junling Liu, together with Huadeng Tech BioArray Ventures Ltd.
The buyer group proposed paying $0.226 per Class A ordinary share, or $4.52 per American depositary share, in cash for the shares it does not already own. Each ADS represents 20 Class A ordinary shares. The proposal was disclosed by 111 on Sept. 17, when the company said the offer was unsolicited and preliminary.
The proposed transaction would be funded with equity capital, according to the buyer group’s proposal. The financing would consist of equity rolled over by existing shareholders and cash contributions from Huadeng Tech BioArray Ventures or its affiliates. The buyer group said the transaction would cover the company’s outstanding Class A shares and ADSs that are not already owned by members of the group.
The special committee’s creation changes the company’s process from an initial board-level consideration of the unsolicited proposal to a formal review by independent directors. The committee is responsible for considering both the specific bid and other potential strategic alternatives, but the Sept. 28 disclosure does not indicate that the board or committee has accepted the proposed transaction.
111 emphasized that no decision has been made regarding the proposal or any alternative. The company said there is no assurance that a definitive offer will be made, that a definitive agreement will be signed, or that the proposed transaction or another strategic transaction will ultimately be approved or completed.
The proposed $4.52-per-ADS price represents a 29.5% premium to 111’s closing ADS price on Sept. 15, the last trading day before the proposal was dated, according to the buyer group’s Sept. 16 letter. The group also said the proposed price represented a 20% premium to the ADS’s average closing price over the preceding 60 trading days.
111 operates digital healthcare and pharmaceutical platforms in China, including its 1 Pharmacy online retail pharmacy, 1 Medicine business-to-business sourcing platform and 1 Clinic online healthcare service. The company has been transitioning toward a more asset-light operating model while expanding digital and AI-enabled services.
The latest filing does not provide a timetable for the committee’s review or indicate whether it has retained financial or legal advisers. The committee’s work therefore represents the next formal step in evaluating the proposed take-private transaction, rather than an agreement to sell the company.
