The voluntary conditional offer made by the Taigang (PAG) to Chunquan Trust was finally settled. As a result, the voluntary conditional offer was invalidated because PAG could not obtain more than 50% of the acceptance of the offer, that is, the offer failed, Chunquan’s major shareholder The status remains unchanged, and PAG can only continue to be the second largest shareholder, followed by the Huizhou transaction. If the major shareholders and their alliances remain unchanged, the Huizhou transaction will pass smoothly, and the spring will be passed. Spring will issue new shares at low prices to pay the price of Huizhou transactions, which will seriously dilute shareholders’ equity.
Continuous appeal against Spring REIT Spring REIT (01426) and Orange Sky Golden Harvest (01132) connected transaction, I feel like I got to be the activist investor same. Seriously, I don’t want to do activist investor. It’s just that when I hold stocks, management or major shareholders are unfair, I certainly don’t like ordinary retail investors. I don’t care about it, I accept it at least, and at least it will be published. Their own views, even calling on other retail investors to respond, exercise the rights of shareholders to oppose all unfair trades or practices.
In many cases, retail investors in Hong Kong are dissatisfied with the misconduct of the major shareholders or management of listed companies, but they only hide their thoughts in their hearts and will not express them or oppose them by action. This is not a purely personal conjecture. The easiest thing is to vote against the Orange Sky Golden Harvest (01132) connected transaction recently. Most netizens do not know how to vote against it. From this, it can be seen that many retail investors may have already rolled in the stock market. For many years, but have not participated in voting or attending the general meeting of shareholders, directly to the management to express opinions or appeals.
Chunquan Trust was listed in 2013 and has been in existence for about 5 years. It was very quiet in the early days. Only two large acquisitions were made in 2017 and this year, including the completion of the acquisition of British commercial properties in July 2017 and the announcement last month. The acquisition of Huizhou Property is not unique, and the two large acquisitions are related to the management.
Let me talk about the background information. The manager of Chunquan Trust is Chunquan Asset Management Co., Ltd. (Manager), whose shareholders are 90.2% of Mercuria Investment Co. (formerly known as AD Capital) and 9.8% of Huamao Property Holdings Ltd. The 9.8% stake in Huamao was transferred to Mercuria. At the same time, the majority shareholder of Chunquan Trust is RCA FUND, holding 27.2% of Chunquan, and Mercuria is also the administrator of RAC FUND, which means that Mercuria is the majority shareholder of Chunquan Manager and also the majority shareholder of Chunquan. The manager, that is, any decision made by the manager, will basically be supported by the major shareholder.
The voluntary conditional cash offer price of PAG for Chunquan Trust is as high as $4.85, but the current stock price of Chunquan is only $4.06, which is 16% discount to the offer price, reflecting that the market has no high hopes for the conditional offer. The main reason is believed. It was related to the pledge of the PAG’s proposal to remove the Spring REIT administrator last year.
According to the voting results of the special shareholders meeting in November last year:
PAG proposed that the resolution of the recall manager (Spring REIT Asset Management Co., Ltd.) could not be passed due to the opposition of 793.5 million shares. 793.35 million shares, equivalent to 62.5% of the total issued shares of 1.269 billion shares, if the 62.5% equity is the true shareholding of major shareholders, managers and their friendly people, and assuming that these 793.5 million shares will firmly support the major shareholders and The manager, all will not accept the offer, then PAG’s offer must end in failure!
PAG announced that it will offer a conditional offer to acquire shares in Spring REIT (01426) at a price of $4.85 per share on September 26.
The offer must be up to two conditions: