Reinventing the Millennium

Fang Zhuo was not idle on the first day of the Lunar New Year. After taking a nap in the morning and enjoying the New Year atmosphere with his family, he hurried to Shencheng Yike's office in the afternoon to start the first day of work in the New Year.

He made an appointment with three business lawyers from New York today.

As for Pan Ben's whereabouts, it's just a sideshow. Lao Xiong is a sensible person. The focus today is to discuss the acquisition plan with the lawyers.

The three lawyers did not just think about Sina's plan in the past two days. They studied Sina's equity distribution on behalf of the well-known New York law firm Cadwalader before taking on the case and came to Shanghai to express their opinions in person.

The discussion this afternoon is about the main issue in this acquisition case. The specific details will be adjusted according to the SEC's bill after the main body is confirmed.

"Fang, first we have to solve a problem. You must explain to the SEC that our acquisition of Sina is based on beneficial considerations and a long-term plan for the development of this company, even if it is a hostile acquisition. "

Attorney Martin sat at the conference table and communicated in English throughout the process. He was the dominant player in the small team of three.

Fang Zhuo pondered for a moment and expressed his understanding: "Well, even if it's true, I can't say it. I understand."

Martin shook his head repeatedly: "No, no, no, Fang, the point is to make my dear judge believe that your plan for Sina is reasonable, beneficial, and can protect the interests of shareholders."

Fang Zhuo thought about it and realized that this was exactly what he was good at, and that was the way it was.

He nodded confidently: "Yeah, I do have a long-term and reasonable plan for Sina."

Martin said happily: "Yes, yes, that's it. You must have this confidence when you say this."

Fang Zhuo: "..."

"Secondary market acquisitions are not only a competition with listed companies, but also a competition with supervision. However, Fang, you don't have to worry, we have rich experience in this area." Martin also showed confidence.

He continued: "Regarding Sina's share acquisition, according to the current situation, we cannot get 67% of absolute control, nor can we get 51% of relative control. The 34% veto control is the target. From this company Judging from the equity distribution, Fang, I think we can’t delay too much and wait for its shareholders to consolidate their equity.”

Fang Zhuo thought carefully.

Martin emphasized: "Sina's current equity is very dispersed. The largest shareholder is Duan Yongji, who only holds 15% of the shares. Fang, your judgment is indeed very accurate. This is a good opportunity to control this listed company. We should Implement it as soon as possible.”

"At this point in time, we think it should be launched after the shareholders' meeting."

"Fang, what do you think?"

Fang Zhuo was a little hesitant because he had never studied Sina specifically. He only remembered that Sina had gone through several CEO changes in the past few years. This portal, which was the first to enter the U.S. stock market, had also been in a trough for a long time.

According to the original plan, he felt that next year would be a good time, and Yike could bring a lot of help in terms of profits and scale.

If it is after this year's shareholders' meeting, it will be in late June, which is only more than three months from now.

However, we can't just wait and see. Who knows what changes will happen now? Can Sina's currently dispersed equity wait until it has more chips? Moreover, the Internet bubble is gradually ending, and the further time goes by, the higher the acquisition cost will definitely be.

Cadwalader Law Firm is professional. Since they make this judgment, they should refer to it more.

"I respect your professional opinions. Mr. Martin thinks this is a good time, so I have no problem." Fang Zhuo said slowly.

Martin nodded, and his face became solemn because of the next words: "To acquire 34% of the shares, we have a very difficult node, which is the 19.9% ​​shareholding. According to the annual report disclosed by Sina, they have fixed management The one-year authorization for additional stock issuance is an old rival in M\u0026A cases, the poison pill plan.”

"In other words, whether it is from the SEC's regulatory perspective or Sina's poison pill plan, when we trigger the 20% clause, Sina is likely to use a poison pill plan to fight back."

"Based on the current market value, it would cost about 10 million U.S. dollars to acquire 20% of Sina's shares. However, once the poison pill plan is triggered, the 20% may be reduced to a minimum of about 5% of the shares, which means our failure. , which also means an unreasonable rise in acquisition costs.”

Martin said seriously: "Fortunately, Sina has many American institutions that hold shares. We can lobby them to further discuss control issues with Sina's shareholders at the negotiation table."

Fang Zhuo frowned slightly and picked up the Sina shareholder information at hand. He had different opinions on this point.

Sina's current major shareholder, Duan Yongji, is an old man. This person has a certain balance with the current Sina management, so as to jointly control the direction of Sina after losing its founder.

Would they be willing to negotiate a transfer of control with someone else at the table after ousting the founder?

Fang Zhuo thought about it and said, "Mr. Martin, there is a saying that it is difficult to get something from the negotiation table that cannot be obtained on the battlefield."

"Since Sina has a poison pill plan that can counter hostile takeovers, it's hard for them to be willing to talk to me about other things."

"There is a Chinese saying that it is better to be a chicken head than a phoenix tail."

“It’s difficult to talk about a 20% acquisition alone.”

Martin digested the young president's opinions for a while and said: "This is our only direction. After we get 19.9% ​​of the shares, we will negotiate and make an offer. We will not cross the line of the poison pill plan first. We will use our share status and high position to make an offer." The final victory will be achieved based on the market price.”

Fang Zhuo had long thought about Sina's countermeasures and asked: "At the shareholders' meeting in June this year, our MIGA fund will definitely join the board of directors. MIGA is the agency holding structure of Xiangjiang Company. I still have my own legal person in China." Investment company, Yike Investment.”

“What if I could get this corporate investment company to also take a board seat?”

"We don't have to worry about the 20% line. Once the MIGA fund triggers Sina's poison pill plan, although it cannot absorb the additional shares, Yike Investment can increase its holdings in large quantities."

"On the surface, MIGA Fund seeks control. In fact, Yike Investment absorbs equity, so that whether it is a concerted action agreement or a simple 34%, it can have a veto control over Sina."

"Mr. Martin, is there room for manipulation under legal principles?"

Fang Zhuo finished describing his idea and asked the most critical questions. No matter how good his idea was, it would be uncomfortable if Sina would backhandedly accuse him and everything would be in vain.

Martin was surprised. He turned to discuss with his two colleagues.

I even picked up my cell phone and contacted New York for a long time to discuss the operating space under the Williams Act. This was mainly because of the boundaries between the registration place of the MIGA fund in the Cayman Islands and the Hong Kong holding company.

This is what business lawyers like him do, making behaviors that wander on the border of violations legal.

The "Williams Act" is to make all operations as transparent as possible, and law firms are trying to find as many gaming operations as possible under the express provisions.

"Fang, I think we can give it a try."

Martin gave the final opinion and praised: "Fang, you are very talented in this area. This is a very creative idea."

"There is nothing new under the sun. In fact, it is just a Trojan horse or an internal and external cooperation to break the fortress." Fang Zhuo breathed a sigh of relief, "If we can confirm compliance, then we need to get another seat."