After the Baowan dispute, Vanke’s stock price fell. Can Wang Shi stay in Vanke?

The "Battle of Wanbao" capital drama has been staged again recently. Wang Shi unexpectedly released his ultimate move and the plot turned around. Vanke announced that on March 12, Vanke signed a memorandum of cooperation with Shenzhen Metro Group Co., Ltd. on the proposed transaction. It plans to mainly issue new shares to the Metro Group, and if there is any difference, it will acquire the Metro Group by making up cash. All or part of the equity held in the target company.

Although the announcement did not mention whether this transaction involves Shenzhen Metro Group’s investment in Vanke, after Shenzhen Metro’s investment, the shareholding ratio of Vanke, China Resources and Shenzhen Metro Group will exceed 40%. If the three parties sign an agreement and become parties acting in concert, they will overtake the Baoneng Group and regain the seat of Vanke's largest shareholder. However, whether Vanke can introduce new shareholders must be approved by 2/3 of the shareholders present at the special shareholders' meeting, including the Baoneng Group. Agree, and this also makes the plot of this drama even more ups and downs.

Looking back at the plot, at the end of 2015, Wang Shi directly denounced the Baoneng Department, which had massively increased its holdings of Vanke shares to "force the palace", as "barbarians at the door." At the end of January 2016, Wang Shi once again publicly declared, "For If a private enterprise wants to become the largest shareholder of Vanke, I will tell you that I do not welcome you." Wang Shi has firmly expressed his determination to fight against the "barbarians at the door" on many occasions.

I believe many people know that the title "Barbarian" comes from the book "Barbarians at the Gate". This book describes the wave of mergers and acquisitions in the United States in the 1980s. One of the most important driving forces behind the wave of mergers and acquisitions at that time was the development of junk bonds. At that time, the U.S. economy was not in good shape and the stock market was also relatively sluggish. The only mergers and acquisitions in the U.S. market were the big ones eating the small ones. But since the advent of junk bonds, they can "snake the elephant", and the "snake" represents capital and barbarians. For example, KKR Group (Kohlberg Kravis Robertsamp; Co.), through the issuance of junk bonds and other large amounts of financing, used highly leveraged capital to annex a large enterprise. This is actually very similar to Baoneng buying 242,600 shares of Vanke through leverage. .

The reason why they are called "barbarians" is because the country that the company founder worked so hard to build seemed to be eaten by "snakes" overnight. It sounds like "barbarian at the door" is a derogatory term. But in fact, in the book, it is precisely the "barbarians at the door" who win in the end. As one of the classic cases of leveraged buyout - the case of KKR Fund's acquisition of RJR Nabisco in the United States, there was also hostility between the management and the new external shareholders. However, because some of the management's decisions were fundamentally To the disadvantage of other shareholders, small and medium-sized shareholders ultimately chose to support the so-called "hostile acquirer" KKR Fund in the vote.

This has also become KKR’s most successful acquisition project. In fact, after the acquisition was completed, the company’s debt ratio was as high as 80. So, how to manage such a company? In Chinese terms, it is called "breaking the cauldron and sinking the boat." From the senior management to the chairman of the board of directors to every employee, it is impossible to spend a penny of the company's money indiscriminately, because there is no retreat for each other. We can only work together and work hard to make the company well, and cherish every penny earned. , most of the cash flow earned is returned to creditors, and the rest is used for investment. In the end, the company developed very quickly, its performance improved significantly, and it was relisted a year or two later.

So, is capital good or bad? There was also great controversy in the United States in the 1980s, with the media and regulatory authorities joining the debate. The ultimate goal of the capital market is to allocate resources reasonably, and the goal of listed companies is to create value for shareholders. This purpose can help us distinguish whether capital is good or bad.

Specifically, the intervention of external capital actually helps promote market-oriented corporate governance. At present, in many listed companies in China, major shareholders control the board of directors, major shareholders nominate board members, and major shareholders recommend managers—in a word, corporate governance is centered on major shareholders. Small shareholders basically have no rights.

So what can small shareholders rely on to resist? The intervention of external capital may pose a threat to major shareholders and give small shareholders the right to choose.

In a controversial situation like Baowan, it is very likely that it is not necessarily a bad thing for small shareholders, and it may even be a good thing. Why? Before the entry of external capital, it is impossible for small shareholders to do anything, and it is also difficult to communicate with small shareholders. And this so-called "barbarian" has the strength and capital to compete with the major shareholders. They can even come forward to contact the small shareholders. Therefore, the emergence of such "barbarians" gives small shareholders the opportunity to choose to "side".

If they feel that the original major shareholder is the best person to manage the company, they can still support the major shareholder, but if they feel that new outside forces can create more wealth for them, they can also support it. foreign capital. How to support? For example, there are proxy votes, or stocks are sold directly to external capital. Therefore, from the perspective of competition, the "barbarians" have given power to many small shareholders, which is in line with the operating regulations of the capital market and is also the fundamental factor for the market to repair itself and automatically reach equilibrium.

In the author’s opinion, we should welcome the intervention of capital. This is completely different from the passive investment of institutional investors. This kind of capital investment is completely proactive management and requires participation in the core management of the company. If the market believes that this outside shareholder's intervention in the company can create better value for the company, then when this major shareholder starts to hold shares, the stock price will rise. In the United States, this is the so-called "Buffett buying stock phenomenon."

So, whether Baoneng is a barbarian or a civilized person in the new business, in the end, it still depends on whether they can increase the value of the company. This is the effective measurement standard.

Many people can’t help but ask, is there a perfect equity setting plan that can defend against barbarians externally, motivate employees internally, and maintain democratic unity? The author believes that there is no perfect thing, only what is best for you. First of all, we must understand what is the purpose of a reasonable equity setting plan? The ultimate goal is to have the most suitable and best management team to manage the company, and under their management, mobilize the enthusiasm of employees, increase the value of the company, and create value for all shareholders, including small shareholders. This is the ultimate goal, and A reasonable mechanism is to create good conditions for this ultimate goal, rather than simply saying that this mechanism serves a certain party.

For example, the United States allows dual stock. There are ordinary tradable A shares, with one vote per share, and B shares. The voting rights of B shares may generally have 10 or 20 votes per share. The person holding B shares is usually the founder of the company, and through the issuance of B shares , in fact, is to achieve founder dictatorship. The companies that implement this mechanism in the United States only account for 6-8 of the total, but there are also several well-known companies that use this dual structure. For example, the two co-founders of Google hold a large amount of B shares, by using B shares to control 56 shares of Google.

There is also Zuckerberg, the founder of Facebook, who controls 50-60 of the company's shares through B shares and stock agreement agency rights. Looking at China again, Liu Qiangdong of JD.com also controls two-thirds of the company’s voting rights through B shares. What are the similarities between these three companies? Their founders are all very powerful, and it should be said that they are the real founders of the company, that is, the core figures. If these people are the best and most suitable managers of the company, and they are the inventors of the company's core technology, then this system is reasonable, and making them "dictator" is the most perfect equity setting plan.

Dual shares also have the advantage of being able to resist all hostile foreign takeovers. Even if external capital acquires all circulating stocks in the secondary market, the total sum cannot exceed the voting rights of B shares. Therefore, issuing Class B shares is equivalent to completely resisting all hostile takeovers. But this is a double-edged sword, which is why only 6-8 companies choose this kind of dual-class shares, although it is allowed by US law and is the company's own decision. Because once the dictator is not the best decision maker, the company will have big problems.

The best and most suitable manager will create value for the company if you give him power. An unsuitable dictator will abuse his power and screw up the company if you give him power.

In the end, what is good finance? In the author's opinion, first, good finance will rationally allocate resources to companies with room for growth and high returns, and help good companies grow. Second, from the perspective of the "Wanbao Controversy", good finance will allow capital operations to promote the marketization of corporate governance. Competition is often a good thing and will benefit small shareholders, which is also good finance. a manifestation of. Because finance exists to help support good companies and serve investors.