Reinventing the Millennium.

Chapter 258 Compliance Game
Fang Zhuo was not idle on the first day of the new year. After sleeping late in the morning and enjoying the atmosphere of the New Year with his family, he hurried to the office of Shencheng Yike in the afternoon to start the work on the first day of the new year.

He made an appointment with three business lawyers from New York today.

As for Pan Ben's whereabouts, it was just an episode in the middle. Old Xiong is a sensible person, and today's focus is to discuss the acquisition plan with the lawyers.

The three lawyers didn't think about Sina's plan in the past two days. They accepted the case after studying Sina's equity distribution on behalf of Cadwalader, a well-known New York law firm, and came to Shanghai to express their opinions in person.

The discussion this afternoon is the main issue in this acquisition case, and the specific details will be adjusted according to the SEC's bill after the main body is confirmed.

"Fang, first of all we have to solve a problem. You must explain to the SEC that our acquisition of Sina is based on beneficial considerations and has a long-term plan for the development of this company, even if it is a hostile acquisition itself. "

Lawyer Martin sat at the conference table and communicated in English throughout the process. He was the dominant position in the small team of three.

Fang Zhuo pondered for a while, expressing his understanding: "Well, even if it's true, I can't say it out, I understand."

Martin shook his head again and again: "No, no, Fang, the point is to convince my dear judge that your plan for Sina is reasonable, beneficial, and able to protect the interests of shareholders."

Fang Zhuo thought about it, and this is what he is good at, and it was like this.

He nodded confidently: "Well, I do have long-term and reasonable plans for Sina."

Martin said happily: "Yes, yes, that's it. When you say this, you must have this confidence."

Fang Zhuo: "..."

"Acquisition in the secondary market is not only a contest with listed companies, but also a contest with regulation. However, Fang, don't worry, we have rich experience in this area." Martin also showed confidence.

He continued: "About Sina's share acquisition, according to the current situation, we can't get 67% of the absolute holding, nor can we get 51% of the relative holding. The veto holding of 34% is the goal. From this company In terms of equity distribution, Fang, I don’t think we can delay too much and wait for its shareholders to carry out equity integration.”

Fang Zhuo contemplated.

Martin emphasized: "Sina's current shareholding is very scattered. The largest shareholder is Duan Yongji, who only holds 15% of the shares. Fang, your judgment is indeed very accurate. This is a good opportunity to control this listed company. We should Implement it as soon as possible."

"At this point in time, we think it should be launched after the general meeting of shareholders."

"Fang, what do you think?"

Fang Zhuo was a little hesitant because he had never studied Sina specifically. He only remembered that Sina had had several CEO changes in the past few years.

According to the original plan, he felt that next year would be a good time, and Yike could bring a lot of help in terms of profit and scale.

If it is after this year's general meeting of shareholders, it will be in late June, which is only more than three months away.

However, you can't wait for the sword. Who knows what kind of changes will happen now. Can Sina's scattered shares wait until they have more bargaining chips?Moreover, the Internet bubble is gradually ending, and the later the time, the higher the acquisition cost will be.

Cadwalader Law Firm is professional. Since they judged this way, they should refer to it more.

"I respect your professional opinions. Mr. Martin thinks this is a good time, so I have no problem." Fang Zhuo said slowly.

Martin nodded, his face became serious because of the next words: "To acquire 34% of the shares, we have a very difficult node, which is 19.9% ​​of the shares. According to the annual report disclosed by Sina, they have fixed management A one-year authorization to issue additional shares, this is the old rival in mergers and acquisitions, the poison pill plan."

"That is to say, whether it is from the SEC's regulatory perspective or Sina's poison pill plan, when we trigger the 20% clause, Sina is likely to use the poison pill plan to fight back."

"According to the current market value, it would cost about US$20 million to acquire 1000% of Sina's shares, but once the poison pill plan is triggered, this 20% may be reduced to a minimum of about 5% of the shares, which means our failure. , It also means that the acquisition cost has risen unreasonably."

Martin said seriously: "Fortunately, Sina has many American institutions that hold shares. We can lobby them to further discuss the control of Sina's shareholders at the negotiating table."

Fang Zhuo frowned slightly, and picked up the Sina shareholder information at hand. He had different opinions on this point.

Sina's current major shareholder, Duan Yongji, is an old man. This person has a certain balance with the current Sina management, so as to jointly control the direction of Sina after losing the founder.

Can they be willing to talk to others at the negotiating table about the alternation of control after the founder is ejected?

Fang Zhuo thought about it and said, "Mr. Martin, there is a saying that it is difficult to get something that cannot be obtained on the battlefield from the negotiating table."

"Since Sina has a poison pill plan that can counter hostile takeovers, it is difficult for them to be willing to talk to me about other things."

"There is a saying in Huaxia that it is better to be a chicken head than a phoenix tail."

"It's hard to go on with a 20% acquisition alone."

Martin digested the young president's opinion for a while, and said: "This is our only direction. After obtaining 19.9% ​​of the shares, we will negotiate and make an offer. Don't cross the line of the poison pill plan. Use the shares we own and the high position To win the final victory at the market price."

Fang Zhuo had long thought about Sina's countermeasures, and asked: "At the shareholders' meeting in June this year, our MIGA fund will definitely join the board of directors. MIGA is a structure held by Xiangjiang Company on behalf of me. I still have my own legal person in China." Investment company, Yike Investment."

"What if I can get this corporate investment company to also take a board seat?"

"We don't have to worry about the 20% line. Once the MIGA fund triggers Sina's poison pill plan, although it cannot absorb additional shares, Yike Investment can increase its holdings in large quantities."

"On the surface, MIGA Fund seeks control. In fact, Yike Investment absorbs equity, so whether it is a concerted action agreement or a simple 34%, it can have a veto control over Sina."

"Mr. Martin, is there room for manipulation under legal principles?"

Fang Zhuo finished describing his ideas and asked the most critical questions. No matter how well he thought, when Sina backhanded his complaints, it would be uncomfortable if everything came to nothing.

Martin was surprised, and he turned to discuss with his two colleagues.

Even picked up the mobile phone and contacted New York for a long time to discuss the operating space under the "Williams Act", mainly because of the registered place of the MIGA Fund in the Cayman Islands and the boundaries of the Xiangjiang nominee holding company.

This is what business lawyers like him do, making behaviors that walk on the border of violations compliant.

The "Williams Act" is to make all operations as transparent as possible, and the law firm is to find the best possible game operations under the express regulations.

"Fang, I think we can try."

Martin gave the final opinion and praised: "Fang, you are very talented in this area. This is a very creative idea."

"There is nothing new under the sun. It is actually just a Trojan horse or a combination of internal and external cooperation to break through the fortress." Fang Zhuo breathed a sigh of relief, "If we can confirm compliance, then we need to get another seat."

(End of this chapter)