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One Step Closer: Ingram Micro Shareholders Greenlight Sale Of Company To Tianjin Tianhai

Michael Novinson

Ingram Micro stockholders have overwhelmingly approved the sale of the distributor to Chinese conglomerate Tianjin Tianhai and signed off on $126 million in payouts to the company's executives and board.

The Irvine, Calif.-based company reported Tuesday in a filing with the U.S. Securities and Exchange Commission that in a landslide vote, its stockholders backed folding the $43 billion distribution giant into Chinese logistics powerhouse HNA Group. Tianjin Tianhai is a partially owned subsidiary of HNA Logistics, which is in turn a subsidiary of HNA Group.

More than 99.8 percent of shareholders present voted in favor of the $6 billion acquisition, with 0.1 percent voting against and 0.06 percent abstaining.

[Related: Six Potential Targets/Suitors, Bidding Battles And Regulatory Risk: How The Ingram Micro-HNA Deal Went Down]

"All indications are that it's going to go through without a problem," said Dave DeCamillis, vice president of sales and marketing at Denver-based Platte River Networks. "That's the impression [Ingram Micro is] getting, and that's the impression that I got."

Shareholders also widely supported paying out $125.99 million for outstanding shares, restricted stock units and options held by Ingram Micro's six top executives and nine directors, with 92.5 percent of stockholders present voting in favor, 7.3 percent voting against and 0.2 percent abstaining.

Ingram Micro's stock remained unchanged in after-hours trading Tuesday at $35.18 per share. That's still 9 percent below the $38.90 per share Tianjin Tianhai will pay out to Ingram Micro shareholders if the deal closes.

Ingram Micro's shareholder approval keeps the acquisition on track to close in the second half of 2016. Tianjin Tianhai and Ingram Micro filed their notification and report forms with the U.S. Federal Trade Commission and Antitrust Division on May 5, and were granted early termination of the waiting period June 2.

The acquisition is subject to approvals by Chinese governmental authorities -- Tianjin Tianhai and Ingram Micro filed paperwork for that March 18 -- as well as clearance by the Shanghai Stock Exchange (SHSE), on which Tianjin Tianhai is listed. Two-thirds of Tianjin Tianhai shareholders must also approve the deal, with the vote taking place no more than 15 business days after SHSE clearance is obtained.

If Tianjin Tianhai shareholder approval is not obtained, HNA Group will directly assume Tianjin Tianhai's rights and obligations under the deal.

Before the deal closes, the companies are further required to submit and obtain antitrust approval from authorities in the European Union, Canada, South Africa, Brazil, Mexico, India, Switzerland and Turkey. The companies filed the required paperwork with India on March 18.

All top executives will remain with the company, except former President and Chief Operating Officer Paul Read, who stepped down from those posts days after the deal was revealed in February and will leave Ingram Micro in September.

Ingram Micro also faces a class-action lawsuit from stockholders alleging that the distributor's directors breached their fiduciary duties by failing to maximize stockholder value, entering into confidentiality agreements containing standstill provisions, and failing to disclose information around the sales process and financial analysis. Ingram Micro said in a filing that it believes the lawsuit is without merit.

Platte River Networks' DeCamillis said he is pleased to see the deal inching toward conclusion, and believes that becoming part of HNA Group will put Ingram Micro in a better position to make additional acquisitions and tap into more markets around the globe.

"It seems like it's a done deal," DeCamillis said, "but it's never a done deal until it's done."

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