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On the eve of the centenary of the founding of China Land, the privatization hits the rocks for the third time, and retail investors rarely beat the "sniper"

2021-12-17T12:05:31.689Z


Huaren Land (0127) voted on the privatization plan of major shareholders today (17th). At 7 pm, the company issued a notice stating that the plan was opposed by independent shareholders and fell through. Huazhi is an old Chinese-owned real estate company founded in 1922.


Huaren Land (0127) voted on the privatization plan of major shareholders today (17th). At 7 pm, the company issued a notice stating that the plan was opposed by independent shareholders and fell through.


Huazhi is a long-established Chinese-owned real estate company founded in 1922. January 24 next year will mark the 100th anniversary of the company.

Taking into account this time, the former chairman and major shareholder Liu Luanxiong (Liu Luanxiong) failed three attempts to privatize the company. This is rare in the Hong Kong stock market and is one of the few examples of retail investors defeating "snipers."


Looking back at the history of Chinese Land, the former chairman and major shareholder Liu Luanxiong (Liu) is actually not the founder of the group.

Looking up the information, the group was founded as early as 1922 and was originally controlled by the two families of Feng Pingshan and Li Guanchun.

However, in the mid-1980s, the two big families had a bad relationship, and the battle for assets broke out. Liu had the opportunity to take advantage of the "sniper" posture to successfully obtain control of Huazhi, retire the Feng and Li family, and repeatedly The rights issue method has forced Wei Li, who is known as the "corporate doctor", to be a sensation.

Detailed report:

Huazhi privatization|Disagreement between the two major families created the true nature of Liu's sniper and swallowed established companies

The first privatization failed and was pursued by Taiwanese businessmen

After removing obstacles, Liu Luanxiong turned his "focus" to privatization.

In October 1989, he announced the merger of two listed companies under China Entertainment into Baohua International, starting the first step of privatization.

However, the price he proposed was not supported by minority shareholders.

At that time, Huazhi’s net asset value per share was 5 yuan, but he only proposed to privatize it at 2.5 yuan per share through Amerco. Later, the price was raised to 2.65 yuan and 2.8 yuan twice. The minority shareholders thought that the bid was unreasonable. With strong opposition from Wei Li, who still holds 7.5% of the shares, 51.9% of shareholders voted against it, and the privatization failed for the first time.

The failure caused the Taiwanese businessman Huang Zhouxuan to covet the high-quality properties of China Real Estate. At the end of July 1990, he proposed to acquire Amico and China Real Estate at a price of 4.8 yuan and 3.35 yuan per share, involving an investment of 6.1 billion yuan.

Under the "sniper attack", Da Liu bought the shares of Huazhi in the market, forced to retreat from Huang Zhouxuan, and further increased his holdings to 61.6%, which strengthened his control.

Liu wanted to privatize Huazhi for the third time, but returned without success.

(Profile picture)

Under pressure to withdraw the proposal, the second privatization failed

In 1991, Liu made another move, but this time only exchanged 1 share of Amico for every two shares of China, privatizing China Real Estate, and some minority shareholders entrusted lawyers to advertise against them; the China Securities Regulatory Commission also intervened, alleging that Amico was lobbying minority shareholders. Accepting the proposal is a violation of the Code of Acquisitions and Mergers, and ordered China Land to not conduct rights issues for six months.

Afterwards, Amico revised the terms of privatization of China Real Estate, and proposed to exchange 200 shares of China for 115 shares of Amico. The minority shareholders passed the privatization proposal unexpectedly by the market.

But in the end, the Securities Regulatory Commission questioned the fairness of the vote. In addition, some minority shareholders were dissatisfied with the government's office to protest. The board of directors of Amico and China Property were pressured to withdraw the privatization proposal at the last minute. Both privatizations ended in failure.

However, Liu's other privatization plans went smoothly. After China Entertainment successfully merged with Baohua International, he succeeded in privatizing China Entertainment through China Land.

Just when the market thought that he would propose to privatize China Land for the third time, it turned out to be uncharacteristically. China Land instead issued new shares to purchase shares from EMG's shareholders, implementing the "children swallowing mother".

Looking at the information, the financial adviser at the time believed that the merger of the two companies had little effect on the asset value. The shareholders meeting of the last two companies passed the acquisition proposal with a ratio of ninety-nine percent. Liu and related parties held 47.35% of the equity. , Chenghua Zhi’s major shareholder has subsequently adopted various “financial skills” to increase its shareholding to the current 74.99%.

In 2014, Liu resigned as executive director, chairman and chief executive officer, and handed it over to Liu Mingwei and his wife Chen Kaiyun (Gambi).

Huafeng's investment in Evergrande stocks and bonds is expected to lose more than tens of billions of dollars.

(Photo by Zheng Zifeng)

Investing in Evergrande lost more than tens of billions of dollars to become the fuse for privatization

In recent years, China Land has rarely developed real estate projects, and invested more in mainland real estate stocks and high-yield bonds. Among them, China Evergrande (3333) is the most promising.

However, the mainland authorities tightened the level of financing for domestic real estate, which plunged Evergrande into a bond crisis, and the prices of stocks and bonds were double-killed.

The group announced earlier that it would sell all of its shares in Evergrande.

These shares were purchased in 2017 and 2018 at a total cost of approximately 13.596 billion yuan, with an average of 15.8 Hong Kong dollars per share. Once they are sold, the accumulated book loss may exceed 12.5 billion yuan.

In danger, it is organic. Affected by the Evergrande crisis, Huazhi’s share price has fallen to nearly 3 yuan. Seeing the stock price is down, Liu Luanxiong took the shot. This year, the company announced the privatization of the company at 4 yuan per share, although it was a 37.9% premium compared to before the suspension. According to the privatization circular issued by the group on the 23rd of last month, after experiencing severe losses, the company’s latest verified net assets were 16.82 billion yuan, and the net asset value per share was 8.82 yuan, which was 32% less than the mid-term. The privatization was used as a discount. Only five and a half.

With the failure of this privatization, some analysts say that the stock price has fallen to at least the price of 2.9 yuan before the suspension of privatization on September 29. If the market continues to have no confidence in the mainland property market, it is not ruled out that the stock price may fall further by then. Fell below the 2.9 yuan level.

China Land closed at 3.78 yuan today, which means that the company resumed trading on Monday, at least a drop of more than 20%.

The privatization of China Land | Sudden suspension of trading in the afternoon This morning shareholders' meeting was quickly completed. Retail investors unanimously opposed the privatization of China Land | Did not respond to questions, boarding the car to leave Huazhi privatization | Changqing shareholders objected that the 6 yuan party rationally reprimanded the company for buying Evergrande

Source: hk1

All news articles on 2021-12-17

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