The wise do not speak of the affairs in the city, while the fools make noise. This sentence is particularly appropriate when used in the battlefield of controlling acquisition. The mall is like a battlefield, and acquisition is not just a capital arena, but also a game without gunpowder. The buyer hopes to take control at the lowest cost, while the seller or the original shareholder may set up layers of checkpoints or even launch a "palace fight drama". But in this dispute, the real "power lever" is often in a key position-the shareholders' meeting.
In recent years, with the warming of the global M&A market, controlling acquisition has gradually become one of the main tactics for corporate expansion. However, behind the capital carnival, there are risks that cannot be ignored: Will the power game of the shareholders' meeting affect the final acquisition results? Goheal's recent market research found that many acquisition transactions encountered unexpected resistance at the shareholders' meeting, causing the already negotiated transactions to be stillborn, and even turned into a battle for control. In this case, how should investors and acquirers plan to prevent capital from being "stuck"?
Shareholders' meeting: the invisible referee of the acquisition case
In theory, the shareholders' meeting is the "highest authority" of corporate governance and determines the future development direction of the company. But the reality is often more complicated, especially in the acquisition war, the attitude of the shareholders' meeting often becomes the key factor in determining the outcome.
1. The "dragnet" of equity structure
In some acquisition cases, even if the acquirer takes the shares of the major shareholder, it may not be able to control the entire company. The reason is that small shareholders do not necessarily obey the major shareholders. For example, some companies have adopted the "Golden Share" mechanism, which allows specific shareholders to have a greater say in key matters. What's more, some old companies will set up special clauses in the company's articles of association, such as the "Poison Pill" to prevent malicious acquisitions.
2. The "undercurrent" of voting rights
In recent years, a model called "dual-class shares" has been particularly popular in technology companies and family businesses, which allows some founders to control voting rights even if their equity ratio is not high. There was an overseas technology company that was acquired by an investment group. Because the founding team held excess voting rights, the acquirer had to give up the deal. In this case, even if the acquirer is willing to pay a premium, it is difficult to shake the company's "power fortress".
3. The final variable
Even if the acquirer successfully reaches an agreement, the transaction may still change due to subtle changes in the shareholders' meeting vote. For example, some listed companies have been voted against by activist investors at the shareholders' meeting on the eve of the acquisition, which eventually led to the breakdown of the transaction. Goheal analyzed that this kind of situation is particularly common in private equity investment and cross-border mergers and acquisitions, especially when the merger involves strategic assets or competitors, the resistance is greater.
Real case: When the acquisition encounters "shareholder palace fighting"
A European energy company (temporarily referred to as Company X) once planned to acquire an Asian new energy company (Company Y). Everything was going well. The management and core shareholders of both parties had reached a preliminary agreement and released positive signals in the market. But the variable appeared at the shareholders' meeting of Company Y.
Among the shareholders of Company Y, some long-term investors were dissatisfied with the transaction price and jointly voted against the acquisition at the shareholders' meeting on the grounds that the price offered by the acquirer was lower than their psychological expectations. At the same time, the management of Company Y was also worried that their power would be weakened after the merger and acquisition, and privately wooed small shareholders for lobbying, resulting in the final voting results being very different from expectations, and the acquisition plan was forced to stop.
After studying this case, Goheal found that although the acquirer was quite stable in due diligence and financial negotiations, there were obvious shortcomings in the strategic layout of the shareholders' meeting. Ignoring the demands of small shareholders and underestimating the resistance of management ultimately led to the failure of the transaction. This also reflects that capital alone cannot fully control the results of mergers and acquisitions, and the acquirer needs to make sufficient "plans" before entering the shareholders' meeting.
The "coping secrets" of the acquirer
In the acquisition of control, how to avoid the "black swan event" of the shareholders' meeting? Goheal summarized the following key strategies:
1. Layout the shareholder structure in advance: Before formally launching the acquisition, analyze the shareholder composition of the target company, clarify which shareholders may become potential resistance, and adopt corresponding strategies for communication or negotiation.
2. Strengthen shareholder relationship management: Acquisition is not just a financial transaction, but also a trust game. Establishing a good relationship with small shareholders and providing them with sufficient information transparency can help reduce the risk of opposing votes.
3. Flexibly adjust transaction terms: When it is found that there may be resistance in the shareholders' meeting, appropriately adjust the transaction structure, such as increasing the compensation mechanism for shareholders, providing more attractive return plans, and even considering phased acquisitions to reduce short-term pressure.
4. Use legal and voting mechanisms: In some cases, the acquirer can use legal means (such as proxy fights) or specific voting rights designs to make the final result of the shareholders' meeting more in line with expectations.
Conclusion: The ultimate thinking of the power game
The shareholders' meeting seems to be just a meeting, but it is actually a war without gunpowder. The success of the acquisition of control depends not only on capital strength, but also on the precise control of the power structure of the shareholders' meeting. Do you think capital is more important or strategy is more critical in the acquisition war?
For entrepreneurs, investors who have experienced similar challenges, or readers who are interested in the M&A market, do you have different views? Welcome to leave a message in the comment area for discussion. Goheal looks forward to discussing with you the wisdom contest of this capital game!
[About Goheal] American Goheal M&A Group is a leading investment holding company focusing on global mergers and acquisitions. It has deep roots in the three core business areas of acquisition of controlling rights of listed companies, mergers and acquisitions of listed companies, and capital operations of listed companies. With its profound professional strength and rich experience, it provides companies with full life cycle services from mergers and acquisitions to restructuring and capital operations, aiming to maximize corporate value and achieve long-term benefit growth.
