Exhibit 2

 

June 11, 2018

David Gao

Chairman and CEO

China Biologic Products Holdings, Inc.

18th Floor, Jialong International Building

19 Chaoyang Park Road

Chaoyang District, Beijing 100125

People’s Republic of China

Dear Mr. Gao:

It is our strong view that China Biologic Products Holdings, Inc. (the “Company”) has been very well managed under the Board’s guidance and with the strong leadership of the management team – all despite macro volatilities in the industry. We are writing to express our sincere interest in acquiring shares of the Company (as further described below) in an effort to offer our strong support to the management team and with hopes to continue to invest in and build the business for the long term. To this end, we would like to discuss our proposal with the Board and get your advice and support to move forward with this proposal in a way that you feel would be best for the Company and its shareholders. We possess deep sector knowledge about the pharmaceutical industry in China and unlike strategic investors, we are keen to keep the Company independent and do not have conflicting priorities. With the goal of creating a valuable outcome for existing shareholders, we are committed over the long term to the existing management team and would welcome any shareholders who are interested in joining our effort as well.

In view of the above, CCRE Holdings Limited, a wholly owned subsidiary of CITIC Capital Holdings Limited (together with its affiliates, “CITIC” or “we”), is pleased to submit this preliminary non-binding proposal to acquire 100% of the outstanding stock of the Company not already owned by CITIC (the “Acquisition”).

We are prepared to offer $110 in cash per share for each outstanding share of the Company not already owned by us, subject to certain conditions as discussed below. We believe this is a highly attractive offer to the Company’s shareholders and look forward to discussing our proposal as you take it under consideration. Our proposal represents a premium of 30.4% to the Company’s closing price on June 8, 2018 and a premium of 30.6% to the volume-weighted average price during the past 30 trading days.

The terms and conditions upon which we are prepared to pursue the Acquisition are set forth below. We believe we are a uniquely positioned acquirer of the Company and are confident in our ability to consummate the Acquisition as outlined in this letter.

1.  Continuity of Leadership. We have significant experience investing in the healthcare space and we place significant value on continuity of leadership within our investments. We hope that the members of management will join their equity interests with us and continue to be shareholders. At the very least, however, we sincerely hope that the existing key members of management can continue to lead the Company after the completion of the Acquisition. With the prior approval of the Board, and at the appropriate time, we wish to engage in discussions with the Company’s senior management team about continuing their roles in the Company going forward.

2.  Purchase Price. The consideration payable for each publicly held share of outstanding common stock of the Company will be $110 per share in cash.

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3.  Financing. While we intend to finance the Acquisition with a combination of debt and equity capital, we are capable of funding fully with equity and our proposal is not conditioned on receiving any debt financing. We expect commitments for the debt financing to be in place when the Definitive Agreements (as defined below) are signed. Equity financing would be provided by investment funds managed or controlled by us, which have more than sufficient uncalled capital to complete the Acquisition.

4.  Next Steps. We are ready to move extremely quickly to complete the proposed Acquisition. We look forward to working with the Board and senior management to get you comfortable with our teams and our commitment to the long term success of the business, its management, and its employees. We are prepared to negotiate and finalize definitive agreements (the “Definitive Agreements”) concurrently with our due diligence review. The definitive acquisition agreement will provide for representations, warranties, covenants and conditions typical and appropriate for a transaction of this size and nature.

5.  Disclosure Obligations. Given our ownership stakes in the Company, we will need to make a Schedule 13D filing and will enclose this letter as an exhibit thereto. We would be happy to discuss this filing obligation with you if you have any question.

6.  Preferred Shares Purchase Rights. The closing of the Acquisition will be contingent upon the redemption and termination of all preferred share purchase rights before any such right becomes exercisable.

7.  About CITIC Capital. Founded in 2002, CITIC Capital is a leading alternative investment management and advisory company in China. The firm manages over US$22 billion of capital from a diverse group of international institutional investors, with multiple asset class platform covering private equity, real estate, structured investment & finance, and asset management. CITIC Capital has over 150 portfolio companies that span 11 sectors and employ over 820,000 people around the world. The firm has successfully led multiple U.S. public acquisitions in the past.

8.  Process. We believe that the Acquisition will provide superior value to the Company’s shareholders. We recognize that the Board will evaluate the proposed Acquisition independently before it can make its own determination whether to endorse it. With the Board’s approval and execution of customary non-disclosure agreements, we would like to begin our due diligence investigation immediately.

9.  Non-Binding Commitment. For the avoidance of doubt, this letter is not intended to be exhaustive of all matters which may be subsequently covered in future negotiations, requests for information, agreements and contracts. This letter expresses our interest in a possible transaction but (with the exception of this paragraph, which shall be binding on the parties) is non-binding and does not create any legal or other obligation whatsoever on the part of CITIC, including, without limitation, any obligation to consummate any transaction. Any binding commitment would only arise by execution and delivery of Definitive Agreements by the appropriate parties thereto. We reserve the right to withdraw this indication of interest without further obligation of any kind at any time and for any reason or no reason.

Thank you for considering our proposal. We look forward to hearing from you to continue discussing our interest in pursuing what we think is an exciting and compelling deal. We strongly believe that our investment experience and familiarity with the industry will allow us to be value-added partners to management and provide a high degree of certainty to shareholders for an expeditious closing. We can make ourselves available to discuss any aspect of the proposal.

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Sincerely,
CCRE Holdings Limited
By:	/s/ Eric Chan
Name:	Eric Chan
Title:	Authorized Signatory of CCRE Holdings Limited CFO of CITIC Capital Holdings Limited

Cc: Mr. Sean Shao, Dr. Yungang Lu, Mr. David Li, Prof. Wenfang Liu, Mr. Zhijun Tong, Mr. Albert Yeung, Mr. Joseph Chow and Ms Yue’e Zhang

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