Yang Yuanqing Becomes Lenovo'S Largest Individual Shareholder

There are indications that

Last Friday, Lenovo Group CEO Yang Yuanqing informed Hongkong United.

Yang Yuanqing's acquisition cost about HK $3 billion 148 million, and its holdings of Lenovo Group's shares rose to about 8.7%, while Lenovo's share accounted for 34.82%.

Lenovo said that after the paction, Lenovo holdings is still the largest single shareholder of Lenovo Group.

Public information shows that Yang Yuanqing has become Lenovo's largest shareholder.

Prior to the paction, Yang Yuanqing had about 70 million shares of Lenovo's equity interests.

According to Lenovo's closing price of HK $4.17 for 17 days, the above 797 million shares are worth about HK $3 billion 300 million.

Lenovo has not disclosed more information about this.

Where does the purchase fund up to HK $about 3100000000 come from?

Lenovo provided directors and executives with a variety of pay, dividends and stock earnings, but these revenues are clearly not enough for Yang Yuanqing to complete the acquisition.

Lenovo's public pay information in the past five years shows that Yang Yuanqing's salary in the 2010 fiscal year includes salary income of $850 thousand, discretionary bonus of $246 thousand, long-term incentive award of $6 million 45 thousand, employer contributions from pension and pension schemes, 85 thousand dollars, and other benefits of 91 thousand dollars, amounting to 7 million 317 thousand dollars, while Yang Yuanqing's income in 2009 is 7 million 229 thousand dollars, and the income of two years is equivalent to about HK $100 million.

Through options or stock cash, Yang Yuanqing also received some cash income.

Public information shows that Yang Yuanqing held 5 million 718 thousand shares of Lenovo Group on March 9, 2010, 10 and 11 and cash HK $30 million 820 thousand.

In the 2009/2010 fiscal year, Yang Yuanqing has won about 33 million shares of Lenovo's long-term incentive plan.

If the portion is fully paid in cash, the value will be about HK $100 million.

In addition to these publicly available income, the annual report of Lenovo Group released in June 2006 showed that Yang Yuanqing's annual salary income increased from HK $4 million 240 thousand to HK $21 million 750 thousand before the acquisition of IBM PC business.

This means that after Yang Yuanqing bought the IBM personal computer business at the end of 2004, the income of six years should be around HK $300 million. Assuming that since Yang Yuanqing entered the Lenovo Group, even if the annual income has reached the income of HK $5 million, the total income in the 22 years is still only about 400 million Hong Kong dollars.

Lv Bowang, a consultancy president, told reporters that the source of funds for the acquisition of Yang Yuanqing may come from two possibilities. One is that Yang Yuanqing has mortgaged the 8% Lenovo Group shares to the investment bank before the completion of the acquisition, and obtained the acquisition loan from the investment bank.

"Investment banks will also be very willing to lend to Yang Yuanqing's" wealth Nouveau ", which is usually the practice of implementing MBO in the company.

Another possibility is that Yang Yuanqing contacted some investors and gathered some consortia to form a concept of partnership, and then completed the acquisition with private investment firm under Yang Yuanqing's personal name.

"Usually the shareholding structure of the private investment firm will be held in different proportions and sold to the private investors who are not willing to be named in exchange for capital."

Second Guo Wei?

However, Yang Yuanqing's personal acquisition means that, like the same family brother and chairman of the board of directors of 00861.HK, Yang Yuanqing will really step onto the road of independent association of Lenovo Group, and is expected to boost the stock price of Lenovo Group, which has been weak for many years at the moment, which is expected to be promoted by Guo Wei.

Liu Chuanzhi often provides "golden parachute" to his subordinates who have followed him for many years, and provides all kinds of income protection for new and old employees by Lenovo holding Employee Stock Ownership Association and various retirement plans.

As Liu Chuanzhi explicitly proposed Lenovo's listing plan this year, it has gradually begun to hand over all its business to its business leaders.

But compared with digital China, Liu Chuanzhi obviously paid more attention to "my life" Lenovo Group.

As early as December 8, 2004, when Lenovo bought IBM personal computer business, Liu Chuanzhi had intended to hand over power to Yang Yuanqing and became chairman of Lenovo Group's board.

However, due to the increase in disputes between foreign CEO and management and board of directors, Liu Chuanzhi returned to the mountain in 2009 when he was in the loss of Lenovo Group in 2009. He was appointed chairman of Lenovo Group's board of directors and replaced CEO Amelio as the time to help Yang Yuanqing overcome the difficulties.

So far, Lenovo Group has become the world's personal computer growth champion for six consecutive quarters, and has achieved a profit for two consecutive years.

Lenovo, which has regained its balance, may replicate the situation of digital management buyout in China.

Guo Wei and Yang Yuanqing also called Lenovo as "young commander". In April 20, 2001, after Lenovo split up, two people were the CEO and President of Digital China and Lenovo Group.

Until August 9, 2007, Lenovo announced that the IBM personal computer department had passed the pition stage. Liu Chuanzhi, who had always been cautious, decided to let Lenovo's second largest subsidiary, Shenzhou digital, fly alone.

Through management buyout (MBO), Guo Wei, the then digital CEO, invested 3 investment funds in August 8, 2007, including Softbank Sai Fu, IDG, Hongyi investment and so on. He proposed a 43% share purchase plan to Lenovo, the largest shareholder of Digital China and another shareholder, pan the Atlantic investment group.

Among them, Lenovo sells 29.6% stake to Softbank Sai Fu, Hongyi investment and IDG three funds, and pan the Atlantic investment group sells 13.34% stake to Digital China President Guo Wei and Softbank Sai Fu investment fund.

The purchase price is HK $3.5 per share, which is 2.78% discount to HK $3.6 per share before the company's suspension, involving a total of HK $1 billion 318 million.

After the completion of the acquisition, Guo Wei, through its wholly owned KIL company, changed its shareholding ratio from 0.10% to indirectly holding 10.29% stake in Digital China, and rose from professional managers to the third largest shareholder of the company.

In December 20, 2007, as the executive director of Digital China Li Qin and Zeng Mao Chao retired, Guo Wei became chairman of the digital China board of directors. The company officially entered the "Guo Wei era".

Last year, KIL, a state-owned holding company, bought 9.8% stake in Lenovo holding overseas wholly owned Affiliated Companies Nanming limited at HK $1 billion 50 million.

To date, Lenovo's stake in Digital China has fallen to around 5%.

Since the announcement of MBO, the share price of Digital China has risen sharply from HK $3.60 in August 8, 2007 to HK $12.80 today, during which it rose to HK $17.06.

Lenovo's share price was 3.90 to HK $5.72 in the past 52 weeks, twice as much as it announced in 2004 when it announced the purchase of IBM's personal computer business.

However, Liu Chuanzhi's control of Lenovo Group may be much closer than that of Digital China. Not only is the shareholding ratio still high, but our reporter once consulted Liu Chuanzhi when he retired from Lenovo Group and focused on the listing of Legend Holdings. He said: "if the board is in need, I am very willing to work in coordination and communication between management and the board of directors."