Speaking of poison pill plans, this is a new way of playing the securities market.

Before this, hostile takeovers in the securities market basically followed the style of a hard bridge and a hard horse, with basically no tricks. The only thing that mattered was who had the most money. They were directly put on the table to compare the size.

Of course, such a takeover war has led to rampant capital, which is very detrimental to the controlling parties who focus on running the company.

So in 1982, Martin Lipton, a famous American mergers and acquisitions lawyer, invented the poison pill plan, officially called "equity dilution anti-takeover measures."

When a company encounters a hostile takeover, especially when the acquirer's shareholding has reached 10% to 20%, the company will issue a large number of new shares at low prices in order to maintain its controlling stake. The purpose is to let the acquirer hold

The decrease in the proportion of shares dilutes the equity and increases the acquisition cost. The purpose is to prevent the acquirer from achieving the goal of controlling the company.

You must know that once the poison pill plan is adopted, it will have at least two effects: first, it will have a deterrent effect on hostile acquirers; second, there will be fewer acquirers interested in companies adopting the plan.

And this anti-takeover measure was legalized by the Delaware Court of the United States in 1985.

Of course, in this way, it gives the controlling party a means to play rogue. This is not conducive to asset restructuring and is not conducive to the rational allocation of capital by the capital side.

But later, a new policy was adopted - increasing the number of independent directors on the board of directors.

For example, the United States later stipulated that more than two-thirds of the directors on the board of directors must be independent directors who are not related to major shareholders.

This means we cannot reject the acquisition unscrupulously. After all, the original management may be interested in the high salary income and will not consider the interests of shareholders. There may even be a situation where the capital side offers a super high price, and the shareholders

I have agreed, but the management still refuses. I just don’t want to be kicked out by the new boss.

But then again, this is another story. There have also been many exciting acquisition cases.

Anyway, both sides are battling with each other in a battle of wits and courage, constantly coming up with some strange and unconstrained moves.

…

However, a few decades later, poison pill plans may have become commonplace. But at that time? How many years had it not been invented at all? Counting from 1982, it was only a dozen years, and there were not even a few cases in the global securities market.

Not to mention the Hong Kong Stock Exchange. There is also an information lag here. Almost all investors have never heard of it - what is the purpose of the poison pill plan?

Therefore, in the news that night, Asia Exhibition disclosed the core of the poison pill plan of the two companies - if Han Palace and related parties acquire another 0.5% or more of Sina's equity, the holders of the stock options (except the acquirer)

will have the right to purchase common shares of the two companies, Power Energy Industrial and Jiuzhou Development, at half price.

Existing shareholders can exercise their rights to increase their equity holdings in Li Neng Industrial and Jiuzhou Development at half price, in an attempt to dilute Han Palace's shareholding and make the acquisition plan futile.

In addition, judging from the current shareholding structure, Han Palace has almost caught up with Yazhan's shareholding and will soon become the largest shareholder of the two companies. And it will definitely succeed, because Yazhan has almost run out of ammunition and food.

If Han Gong holds more than 51% of the shares, he will automatically become a member of the board of directors of Lineng Industrial and Jiuzhou Development. And through the shareholders' meeting, Han Gong can enter the Sina board of directors with the permission of various shareholders.

However, the layout of the boards of directors of Lineng Industrial and Jiuzhou Development is that hinge structure.

The nine directors on the board of directors are divided into three terms, with three-year terms and staggered terms. Only one director term expires each year and a new director is elected. Therefore, if the acquirer Han Gong cannot reorganize the boards of directors of Li Neng Industrial and Jiuzhou Development

And the management, no matter how many shares he has, it means there is no acquisition, because there is no way to implement reorganization and launch new strategies.

According to the "Poison Pill Plan", if Han Palace wants to reach 20% of the equity, it must pay half of the acquisition cost. It can be seen that the Poison Pill Plan objectively dilutes the shareholding ratio of the hostile acquirer and increases the shareholding ratio.

The cost of acquisition may cause major difficulties in the target company's cash flow, causing financial risks.

This made Han Palace, a hostile acquirer, very difficult as soon as it took over. It made Han Palace feel as if it had swallowed a poison pill and finally achieved its goal of anti-acquisition.

Okay! It seems that there are more professional terms. Let me explain briefly:

If Han Palace wants to acquire Lineng Industrial and Jiuzhou Development, not only will it need the acquisition fee in the original plan, but after calculation, it will also need to pay an additional fee of about HK$800 million?

In addition, in order to reorganize the board of directors and management as soon as possible, high liquidated damages need to be paid, also above HK$200 million?

When calculating both the internal and external aspects here, an additional cost of HK$1 billion needs to be added? And are these two shabby penny stocks the only ones being acquired?

…

I choose! After understanding this poison pill plan, the whole Hong Kong was in an uproar and felt that it was worth the price of admission - can the takeover war of listed companies still be played like this?

It has to be said that this is where Lin Yuankang is one step ahead. After all, he has worked on Wall Street and has certain advanced experience, which completely defeats these bumpkins in Hong Kong.

Before this, the stocks on the Hong Kong Stock Exchange did not know that they could play this way, so there were still quite a few loopholes in terms of terms.

However, after Lin Yuankang acquired Lineng Industrial and Jiuzhou Development, he closed this loophole through the board of directors and added the terms of the "poison pill plan".

But at this moment, this preventive measure had the effect of a surprise attack, giving the Han Palace a head-on blow. It caught everyone off guard!

That’s HK$1 billion!

The sudden accident also caused a sensation in the entire Hong Kong financial circle. They quickly found cases on Wall Street and began to analyze them carefully.

This chapter is not over yet, please click on the next page to continue reading! Wu Jierui and the others were even more shocked. They never thought how could such an accident happen? So everyone in the Han Palace became in a hurry, and they didn’t know what to do for a while.

What was the reaction?

…

"Wow! I'm finally home!" Li Yunyun shouted and rushed into the room, followed by two followers, Xiaoxuan and Qiqi.

However, Baozhu suddenly appeared, startling everyone: "You are finally back. Sister Lanlan bullies me every day! She ate all my cookies——! Wow——!"

(⊙_⊙)(⊙_⊙)(⊙_⊙)……

Baozhu burst into tears with grievance. Li Yuan almost stopped laughing and didn't want to pay attention to this silly boy.

What a serious cookie incident!

A group of children were chattering happily outside, while inside they were busy changing Xiao Yuyu's diaper.

There is really no such thing as disposable diapers nowadays. It is difficult to buy them outside. You usually have to order them overseas.

And this girl also loves to be clean, which makes the mother-in-law and daughter-in-law very confused.

Li Yuan smiled and said: "I'll call Hong Kong and ask them to send a few boxes quickly."

Gu Yuqin squinted her eyes: "How many times have you said this? Why haven't you seen it?"

Zhang Zhen expressed her objection: "It's only comfortable to use old clothes. Disposable ones are definitely not good because they are not breathable."

Li Yuan didn't want to say more. This is the old concept of the older generation. After all, who is going to wash the diapers... Huh? There seems to be a girl who likes to eat biscuits secretly, right? It's her! Haha.

Indeed, in terms of living habits, many daily necessities that will be commonplace in the future will not be available in China at present. For example, disposable diapers, and... and... there are so many messy products in online shopping.

Well, almost everything imaginable is there!

The little fish has been scrubbed clean, kicking on its two fleshy calves, shaking its head and tail happily.

"Mom, hold her, I need to change her diaper."

"This kid is quite strong."

"That's right! Why aren't you quiet at all? You don't look like a girl."

"That's right, it was all spoiled by his father."

"..."

Li Yuan couldn't help but rolled his eyes. As a male creature, how could he not control his sister or slave his daughter? Forget it about the brat, sooner or later kick him out and let them fend for themselves...

While I was thinking wildly, the phone rang:

"Master Yuan, I didn't want to disturb you, something very unexpected happened." The caller was Jerry Wu.

"What's up?"

"That's it... do you know about the poison pill plan? We have already launched the acquisition of Lineng Industrial and Jiuzhou Development. It went well at first, but they suddenly launched the poison pill plan? Oh! The poison pill plan, I just learned from my old classmate

Check it there. Maybe you don’t know clearly, let me explain it to you..."

"No, no, no." Li Yuan was a little unhappy because he was disturbing Li Yuan's play with his daughter. "I know about the poison pill plan. What plan did they come up with?"

In the next few decades, the securities market will become more and more exciting, especially in Internet and high-tech start-ups, and even countless unicorn companies have emerged.

It is no exaggeration to say that it is like the kind of gameplay in the future? Now, it is almost two eras. How could one not understand the poison pill plan? It has almost become the standard anti-takeover strategy of listed companies.

There are even more exaggerated ones. When financing, they are divided into AB shares, and ABC... shares.

Why do B shares only have one-third or one-quarter of the voting rights? C shares only enjoy dividends and have no voting rights on capital stock, etc.?

What are poison pills? Just some old-fashioned tactics.

Feeling that Li Yuan was disapproving, Wu Jierui quickly introduced: "Oh, Mr. Yuan, the plan they proposed is..."

Li Yuan listened carefully to Wu Jierui's introduction and thought about it silently in his mind. There was nothing new at all, just some "routine operations", wasn't it?

"Jerry, how did you discuss it?"

"We have already calculated that the acquisition cost will be increased by more than 1 billion, otherwise the acquisition will not be successful. But if we give up now, I can guarantee that the loss can be controlled within the range of HK$40 million."

"Yeah, keep going."

"Shao Yuan, I don't think those two companies have such high valuations. We should stop the losses in time and stop playing with them. Also, if you want to teach Lin Yuankang a lesson, you can definitely look for opportunities in the future."

There is nothing wrong with Jerry Wu's idea.

After all, in his eyes, the poison pill plan is a new thing, and no one knows how it will change. What if another problem appears after investing an extra billion Hong Kong dollars?

So the first reaction is to avoid danger.

Li Yuan was also hesitant. Everyone should know that he didn't have much interest in those two listed companies. He just wanted to disgust Lin Yuankang.

And those two stocks are either blue chip stocks or penny stocks? Apart from the value of the company itself, the rest is just the value of shell resources.

To put it bluntly, the total market value of the two stocks added together is only a few hundred million Hong Kong dollars.
To be continued...