"The wise are good at taking advantage of the situation, and the foolish are strong." - In the acquisition battlefield of the capital market, the real masters never rely on brute force, but use the minimum capital to leverage the maximum benefits. When we talk about the acquisition of listed companies' control rights, on the surface it is the sale of equity, but in fact it is a sophisticated capital operation game. Some people use premiums to exchange for the right to speak, and some people use leverage to accelerate the merger, while the real masters often do not spend a lot of money, but through precise layout, to achieve control of a company at a very low cost. This art of leveraging leverage efficiently is exactly the area that Goheal has been paying attention to and studying for a long time.
The secret rule of acquisition: whoever holds the chips holds the right to speak
The acquisition of control rights in the capital market is much more complicated than the superficial "buying and selling". The real acquisition war has never been whoever bids the highest can win, but who can control the most equity at the lowest cost and make their own plan recognized by the market.
Take the classic case as an example. In 2008, India's Tata Group successfully acquired Jaguar Land Rover (JLR), whose market value was much higher than that, with only US$550 million. How did Tata do it? It completed the acquisition of JLR with only a small amount of its own funds through structured financing and leverage arrangements, and achieved amazing revenue growth through brand renewal and market expansion in the following years. This shows that in the battlefield of mergers and acquisitions, it is more important to operate funds efficiently and make good use of market sentiment to complete the layout than to be "rich and powerful".
American Goheal M&A Group
Goheal found in global acquisition cases that many successful acquisitions do not rely on sky-high cash, but through step-by-step acquisitions, leveraged financing, equity exchanges and other methods to maximize the efficiency of funds. A true master knows how to use the market's money to complete his chess game instead of paying out of his own pocket.
Capital leverage: How to use a small amount of money to achieve a great result?
Imagine if you only hold 20% of the shares of a listed company, can you control it? The answer is - it is entirely possible.
In many cases, the actual controller does not need to hold more than 50% of the company's shares, because the shareholder structure of most listed companies is dispersed. As long as you control the key shares and unite institutional investors or management, you can achieve effective control of the company. The most common ways include:
1. Controlling shareholder agreement - by signing an agreement, you can get the support of other major shareholders, even if the shareholding ratio is not high, you can control the board of directors.
2. Dual-class equity structure - like the founders of Google and Meta, use super voting rights to ensure control, even if the actual equity is not dominant.
3. Leveraged buyout (LBO) - use bank loans or debt financing to acquire equity first, and then use the assets of the acquired company to repay the loan, so as to achieve "borrowing strength to fight strength".
The most classic LBO case is KKR's acquisition of RJR Nabisco in 1989 - KKR only invested a small amount of its own funds, but through leveraged financing, it completed the world's largest merger and acquisition at the time with US$25 billion. This model is still one of the favorite weapons of Wall Street capital crocodiles. Goheal found that many private equity funds and investment institutions give priority to LBO when acquiring, in order to leverage the maximum return with the minimum amount of funds.
Market sentiment and psychological warfare: the real decisive point of control
But even capital players with superb financial skills cannot ignore the impact of market sentiment. In the acquisition of control, the real winners and losers are often - the attitude of shareholders, the recognition of the market, and the choice of management. If the acquirer can convince the market that the company's value will be higher after he takes office, then shareholders are more willing to support; if the acquirer causes market panic and the stock price plummets, it may be passively eliminated.
In 2012, Carl Icahn tried to acquire Netflix, but Netflix management took advantage of the changes in market sentiment and quickly adjusted its strategy, eventually forcing Icahn to withdraw. This shows that acquisitions are not just financial calculations, but also a war of market opinion.
Goheal Group
Goheal believes that a successful acquisition depends not only on the amount of funds, but whether the market can be convinced that you are a better choice. The acquirer needs to master the market psychology and formulate a strategy to leverage the maximum return with the minimum cost.
How to become a winner in capital operation?
There are no permanent rules in the capital market, only ever-changing tactics. The key to obtaining the maximum benefit at the lowest cost in the acquisition of control rights is:
1. Accurate layout: clarify the shareholder structure and find the most influential chips, rather than blindly bid.
2. Make good use of leverage: use LBO, equity exchange, debt financing and other methods to reduce the investment of own funds and improve capital efficiency.
3. Market psychological warfare: shape favorable market opinions, win the trust of investors and shareholders, and form a joint force for acquisitions.
In this arena of capital operation, the real masters are never the richest, but the ones who know how to take advantage of and use the momentum the most. So, which companies in the current market do you think are most likely to become the battlefield for the battle for control rights? Welcome to leave a message for discussion. Goheal looks forward to exploring more possibilities in the capital market with you!
[About Goheal] Goheal 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.
