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On Tuesday, March 24, 2015, Hunter Biden <hbiden@rosemontseneca.com> wrote:

> Let me know a good time for tomorrow.
>
> RHB
> 202.333.1880
>
> On Mar 23, 2015, at 5:07 PM, James Bulger <jbulger@thorntonai.com
> <javascript:_e(%7B%7D,'cvml','jbulger@thorntonai.com');>> wrote:
>
> Hunter
>
> I am concerned about what happens if we win the Hanson deal Saw no sense
> in prematurely ringing the alarm in light of the fact we still I have no
> knowledge of exactly what a success means here to BHR.
>
> We have a problem with Jonathan and his team on a number of fronts
>
> A fix is not easy but if we hope to get BHR moving forward we had better
> get a plan in place.
>
> Do you guys have time for a call before Wednesday mornings Aleris call? I
> know you are both out of town but a half hour call prior to our next
> conversation with BHR would help us handle the Aleris call . Lay some
> ground rules down for the crew in Beijing
>
> You guys have time tomorrow for a quick chat?
> Jimmy
>
> On Monday, March 23, 2015, Hunter Biden <hbiden@rosemontseneca.com
> <javascript:_e(%7B%7D,'cvml','hbiden@rosemontseneca.com');>> wrote:
>
>> Jimmy-
>> I couldn't agree more. What I don't understand is why they wouldn't want
>> us directly involved. I understand after 10 years of this the cultural
>> differences blah, blah... But, in this case it defies all reason and logic.
>> It's almost as if they are trying to keep us away from the deal. After our
>> last board meeting where we expressly asked to be included I followed up
>> with emails asking for information about the company to see if we had any
>> connections to the board etc... And heard nothing. Another concern is that
>> they do buy a US company and offshore it and we are caught blindsided by
>> negative press. Anyway- we have to begin to change their behavior for this
>> to work.
>>
>> RHB
>> 202.333.1880
>>
>> On Mar 23, 2015, at 3:21 PM, James Bulger <jbulger@thorntonai.com> wrote:
>>
>> Gentlemen,
>>
>> I am sending you this brief note about the car parts manufacturer, code
>> named the Hanson (AVIC is co-investor) deal in order for you to get an
>> understanding of how I think we "might" help BHR management.
>>
>> During our call with Xin today (which neither Jonathan nor anyone else
>> from BHR besides Xin joined) we learned that BHR/AVIC lost the Dickson bid
>> to a Japanese firm. If you recall this was a bid on another auto parts
>> manufacturer that BHR was very keen on winning. We've been briefed for
>> months about how the Dickson deal was coming along and, when I've had a
>> chance, I've volunteered the American sides' assistance in order to help
>> with that deal. This was often met with nods and words of approval by the
>> BHR team but no real effort was made to seek our help. Well when we stopped
>> hearing about this deal recently I feared the worst and now today we have
>> had it confirmed by a subordinate of Jonathan's in an off-handed comment on
>> a conference call that our bid was not accepted and that the deal had
>> died...
>>
>> Unfortunately this pattern of behavior is more of the same from the BHR
>> side.
>>
>> Now I point that out just because, while BHR lost the Dickson deal, there
>> is another auto-parts deal that is ongoing and that is the Hanson project.
>> We learned today on the phone call that the final binding offer on the
>> Hanson deal is due on April 6th and three other competitors remain. Xin
>> believed this project could close as early as May if our bid was accepted.
>> Xin also mentioned that AVIC is very keen on winning the Hanson deal
>> especially since we lost the Dickson bid.
>>
>> During previous calls and meetings in Beijing I learned that Xinzhong has
>> been working on this deal and he has spent weeks in Detroit with the AVIC
>> team reviewing documents and interviewing Hanson executives generally
>> conducting DD.
>>
>> I have tried many times to get information regarding this project, but in
>> true Chinese fashion information is not readily shared with us. This
>> despite the fact that the seller is based in the USA and that the bidding
>> process is being conducted by the seller's investment bank whom we might
>> have direct connections to. However, this is a very large deal in dollar
>> terms and after the SINOPEC snafu closing a large deal in April would be
>> very beneficial to BHR.
>>
>> The seller is based in the Detroit area. At this time in the process it
>> might be too late to help BHR from the US side particularly in light of the
>> fact that there is a bidding process being conducted by an Investment Bank
>> on behalf of the seller.
>>
>> It is my belief that I and perhaps one or both of you might still be able
>> to assist in the process. For example, having a large Chinese entity such
>> as AVIC trying to purchase a large manufacturing entity in the US might be
>> disconcerting to local stakeholders such as Unions and local elected
>> officials concerned about job losses to an overseas buyer. In order to
>> mitigate such valid concerns it would be wise for me to meet local elected
>> officials (through SLLF contacts) and brief them on our plans for the
>> business post purchase. At the very least having us associated with the
>> buyer would help allay some fears in the mind of the seller and other stake
>> holders. Consider for a moment that one of the other 3 bidders is a US
>> based company. It is plausible then that they are prodding the seller to
>> stay onshore etc..... The other 3 bidders have not been disclosed to me and
>> yes I have asked in the past for their names. Perhaps there is a consultant
>> hired by Hanson on the Federal level, if there is such a consultant then
>> perhaps he is friendly and perhaps he should be made aware we all are
>> stakeholders in this endeavor, that would be good information for Hanson
>> (the seller) to have in hand.
>>
>> One of BHR's strong points is that we have excellent partners/owners in
>> the US. Here we have a situation where BHR coupled with AVIC is bidding to
>> buy a large US based firm and the US based owners/ Board members of BHR are
>> kept in the dark.
>>
>> I believe we could have helped a company we OWN win a significant piece
>> of business. Perhaps it is too late in the process, and maybe BHR
>> management has a very good reason for not involving any of us in the
>> process but here are a few final thoughts to consider:
>>
>> #1. I don't know how the deal is structured so I don't even know how BHR
>> gets compensated. Clearly our Fund is not fully funded so we likely will
>> not invest alongside AVIC, unless of course this is a deal where if we win
>> it Gouxin would come into our fund as a large LP.
>>
>> #2. I'm pretty sure Lazard is acting as the BHR /AVIC banking
>> consultant. I know you guys have relationships over at Lazard. I think
>> Lazard would be wise enough to know how, or if we as individuals, might be
>> able to assist in this process. Do you think it might be wise to speak to
>> someone at Lazard? With the full knowledge of Jonathan and management of
>> course, not looking to upset the apple cart here. Lazard should at least be
>> made aware that we have an interest in helping.
>>
>> #3. Without seeing a budget and projections from Management I have no
>> way to determine what fee etc.... This Hanson deal actually means to BHR.
>> Clearly though a win is a win, and Burnham for instance, would be happy to
>> mention a win other than SINOPEC while they are out fundraising.
>>
>> I hope you take the time to read my note. I am using this deal as an
>> example of how our management team needs to open up the communications.
>> There is no excuse for the 3 of us not to be involved at some level in the
>> Hanson project. We own BHR, furthermore we want it to succeed as much as
>> anyone. The BHR management team has kept us in the dark. It troubles me
>> that the management team at BHR never asked for our thoughts, advice or
>> insight while chasing a buy out of a very large US firm.
>>
>> I suggest that we all have a call about this before the BHR conference
>> call on Wednesday so that we can make sure that we as Americans are all on
>> the same page. Let me know when you guys are free.
>>
>> Thanks,
>> Jimmy
>>
>> --
>> James J. Bulger
>> Chairman
>> Thornton Group LLC
>> 14 Beacon Street, Suite 804A
>> Boston, MA 02108
>> Office tel: 617.248.9440
>>
>>
>
> --
> James J. Bulger
> Chairman
> Thornton Group LLC
> 14 Beacon Street, Suite 804A
> Boston, MA 02108
> Office tel: 617.248.9440
>
>

--
James J. Bulger
Chairman
Thornton Group LLC
14 Beacon Street, Suite 804A
Boston, MA 02108
Office tel: 617.248.944