Chinese firm backs out of deal to buy New Jersey choir college

A Chinese company has withdrawn from a $40 million deal to buy Westminster Choir College from Rider University in New Jersey, after the company's board voted unanimously against the acquisition due to "uncertainty" that it would be successful.

The Beijing Kaiwen Education Technology Co Ltd had been expected to complete the purchase of the prominent music college in Princeton on Monday. It had signed a sales agreement with Rider in June 2018.

But on Friday, Kaiwen's board of directors met and voted 7-0 to "terminate" the purchase of the nearly century-old school to avoid "uncertainty that the original transaction will continue to advance after June 30, 2019''.

Following the collapse of the deal, Rider University announced that its board had approved a plan to integrate Westminster Choir College into the university's existing Lawrenceville campus beginning in September 2020. It added that it would continue to work with Kaiwen "over the next three years on academic and artistic initiatives''.

In a transcript of the minutes from the Kaiwen meeting, the board stated: "After friendly negotiation, Wenhua Xuexin and the US Rider University signed an Agreement on Termination and Cooperation, terminating the original Acquisition and Sale Agreement."

The Chinese-for-profit company, which was called the Jiangsu Zhongtai Bridge Steel Structure Co until December, had faced a barrage of opposition to its plans to buy the small music school, which was founded in 1926.

The Westminster Foundation — a group of alumni and donors — sued it to block the sale over fears that Kaiwen could shutter the college if it did not make a profit. The foundation did not respond to a request for comment.

Another suit was filed by the Princeton Theological Seminary, which alleged that Rider University's decision to sell the school to Kaiwen went against the wishes of the donor who gave the college to the seminary's Princeton campus in 1932.

The office of the New Jersey attorney general also launched an investigation into the planned sale. In March, it filed an opinion with Superior Court Judge Paul Innes, who presided over both lawsuits against Rider, that under terms of the 1930s land donation, the campus must continue to be used for the school's educational and religious mission.

Rider President Gregory G. Dell'Omo said in a statement: "Throughout this process, we have continually sought to preserve and enhance Westminster's legacy as a world-class institution, and we made every effort to maintain the college in Princeton.

"Given the enormous complexity of the transaction, it became increasingly clear that partnering with an outside entity, even one as well-intentioned as Kaiwen, was not feasible on a viable timeline."

Rider University first put Westminster Choir College up for sale in March 2017, citing financial woes. It said it contacted 281 potential buyers during the search for a new owner and agreed to work with Kaiwen after it offered a $56 million package that included $16 million in upgrades.

Kaiwen said that it, along with two subsidiaries, and a non-profit called the Westminster Choir College Acquisition Corp, would buy the music conservatory. The agreement stated that Kaiwen would have to operate the company for no fewer than 10 years and operate the academic curriculum for at least five years.

But a key sticking point among critics who filed the lawsuits was that after the purchase Kaiwen could do what it wanted with the college, including sell it.

"Now that it is clear that transferring Westminster Choir College to an external partner is not possible … it is not financially feasible to allow Westminster to continue on its present course as a separate, fully operational campus seven miles apart from Rider's Lawrenceville campus," Rider Board of Trustees Chairman Robert S. Schimek said in a statement.

The university's new plan will create a Westminster College of the Arts. That will include Westminster Choir College in Princeton, the School of Fine and Performing Arts in Lawrenceville, and the Westminster Conservatory in multiple locations.

Dr Marshall Onofrio, dean of the Westminster College of the Arts, said, "It is my hope that students, faculty, staff, and alumni will unite around this opportunity and participate in creating a new chapter in Westminster Choir College's illustrious history."