In recent months, three companies have announced connected transactions, including Orange Sky Golden Harvest (01132), Spring REIT (01426) and Yongsheng New Materials (03608). I wonder if you have noticed any commonalities between the three transactions. What is the revelation?
Coincidentally, the acquisitions involved in the three connected transactions are commercial properties of domestic second- and third-tier cities held by major shareholders or connected persons. Among them, Orange Sky Golden Harvest acquired the Jiangyin property held by the major shareholder, and Chunquan acquired the Huizhou property. Shopping malls, while Yongsheng acquired commercial properties in Hangzhou Xiaoshan Development Zone held by major shareholders. The message behind the transaction is that the commercial properties in the second- and third-tier cities in China have entered the cold winter, and the supply is much higher than the demand. The property held by the investors has become a difficult burden. Therefore, it is only impossible to use the listed companies to take over. The baggage is also a way to make a profit. After the announcement of this “stubborn” transaction, the stock prices of the three companies fell immediately, reflecting the consensus of the market.
Of course, although the nature of the transaction is similar, there are some differences. For example, Orange Sky is the full cash payment price, Yongsheng is part of the cash, part of the new shares are paid, and Chunquan is the big discount to pay the new shares to pay the full price.
Fortunately, the three connected transactions must be approved at the general meeting, and the acquisition of Orange Sky and Yongsheng is defined as a connected transaction. Therefore, the major shareholder cannot participate in the voting; the acquisition of Chunquan avoids the connected transaction. All shareholders can participate in the voting. Fortunately, the second largest shareholder PAG has opposed it. Therefore, the three shareholders of the transaction have the ability to veto. The key is that the minority shareholders must exercise their rights, participate in the voting to veto the transaction, and protect their own. Benefits are not eroded, don’t leave it alone, let anyone kill!
PS Chunquan’s transaction is not a connected transaction in name, but I have explained several previous articles about Chunquan. Although it is not a connected transaction in name, it actually has a strong color of connected transactions, so I will be the transaction myself. It is a connected transaction.