The uncertainty of Rongsheng quanchai's marriage or stranded acquisition case has increased
the uncertainty of Rongsheng quanchai's marriage or stranded acquisition case has increased
China Construction Machinery Information
Guide: since this year, due to the economic downturn and the sluggish performance of a shares, the uncertainty of some previously determined acquisition cases has increased. The recent game between the shareholders of Rongsheng heavy industry and quanchai power (600218) has intensively revealed the risks in the acquisition of listed companies. Rongsheng acquisition faces major uncertainty
since the beginning of this year, due to the economic downturn and the sluggish performance of a shares, the uncertainty of some previously determined acquisition cases has increased. The recent game between the shareholders of Rongsheng heavy industry and quanchai power (600218) has intensively revealed the risks in the acquisition of listed companies
Rongsheng's acquisition is facing major uncertainties
as the largest private shipbuilding enterprise in China, Rongsheng heavy industry signed an agreement with the government of Quanjiao County, Anhui Province, in April, 2011 to transfer 100% of the equity of quanchai group at the price of RMB 2.149 billion, which holds 44.39% of the A-share listed company quanchai power. According to relevant regulations, the acquisition of more than 30% of the equity of a listed company triggers the obligation of tender offer. For this reason, Rongsheng heavy industry issued a tender offer report to the remaining 56% of the shareholders of the listed company at the price of 16.62 yuan/share based on the average share price of quanchai power 30 trading days before the issuance of the acquisition announcement
since this acquisition needs to be reviewed by the SASAC, the Ministry of Commerce and the CSRC before it can take effect, Rongsheng heavy industry then began to apply for materials, and received the approval from the Ministry of Commerce and the SASAC on August 9 and August 26 of that year. The approval from the SASAC is valid for one year, that is, it expires on August 26 of this year. However, for various reasons, Rongsheng heavy industry has not reported relevant materials to the CSRC. As the approval of SASAC is about to expire, the acquisition faces major uncertainties
there is no absolute security monitoring system for risk-free arbitrage, etc.
if Rongsheng heavy industries gives up the acquisition, it may be detrimental to some investors who bet on the restructuring concept. Since September last year, affected by the European debt crisis and the decline of the market, the share price of quanchai power has fallen below the tender offer price of 16.62 yuan, resulting in certain arbitrage opportunities. Some institutions took the opportunity to enter or overweight. According to the 2011 Annual Report of quanchai power, Societe Generale global vision fund increased its holdings by 2180000 shares in the fourth quarter of that year, and some private placements also increased their positions to varying degrees. In the first quarter of this year, Societe Generale global vision fund continued to increase its position by 1.75 million shares, and Orient Securities, Changjiang Securities and other institutions became new members of the game
however, an announcement made by quanchai power in mid July this year cooled the restructuring expectation pursued by the market. The announcement said that the current European debt crisis is getting worse, the domestic and foreign shipbuilding market has fallen to the lowest point in history, and Rongsheng heavy industries' business has also been impacted. At present, the acquirer is studying the future development plan according to the new situation, and there is major uncertainty about the success of this transaction. As soon as the announcement was made, the share price of quanchai power fell sharply. The latest offer was only 9.32 yuan, about 70% of the offer price of 16.62 yuan
despite the withdrawal of the acquisition, Rongsheng heavy industry still needs to place it at will? A: our experiment is destructive and bears a certain price, but a securities analyst believes that this possibility still exists. Because if Rongsheng heavy industry acquires quanchai group, it will make an offer to acquire the remaining 56% shares (157million shares) of quanchai power. Due to the large gap between the current share price of quanchai power and the tender offer price, most investors will sell their shares to Rongsheng heavy industry. 3. Rongsheng heavy industry has to pay an additional 2.6 billion yuan to accurately measure the length, width and height of each position with a square, which is a great cash flow pressure for the troubled shipbuilding industry
in addition, Rongsheng heavy industry originally planned to acquire quanchai group. In addition to complementary industrial chains, it also took a fancy to quanchai power's A-share listed company identity. If most investors sell their shares to Rongsheng heavy industry after the tender offer is implemented, resulting in the public shareholding ratio of less than 25%, the delisting clause will be triggered, which is not what the acquirer and the local government want to see
according to huangjianzhong, an associate professor of the school of finance of Shanghai Normal University who has investment banking experience, some investors believe that when the share price of a listed company is lower than the tender offer price, there is risk-free arbitrage space. However, the fact is that this kind of arbitrage is not absolutely safe because the acquirer may give up. "It's like two people falling in love but not necessarily getting married. It's still possible to break up before the formal wedding."
in addition, for acquirers, with the strengthening of China's protection of small and medium-sized investors, when purchasing the controlling rights of A-share listed companies, we must consider the subsequent tender offer risks, because most of these tender offers are passive rather than active. When considering delaying or abandoning the acquisition, the information disclosure shall be timely, complete and accurate to give investors sufficient room for manoeuvre