The AB Market Of M & A Market Under The Epidemic Situation: The Performance Promise Student Becomes The Reorganization Stumbling Block Capital To Search For The "Bottom Up" Merger And Acquisition Opportunity

The impact of the new crown pneumonia epidemic on asset restructuring is gradually emerging.

On the evening of March 17th, Hongyu new material and energy announcement of construction and Investment announced the termination of major asset reorganization and issue of shares to purchase assets and related transactions.

When disclosing the reasons for the termination, two listed companies all mentioned the impact of the new crown pneumonia epidemic.

Since the outbreak of the epidemic, capital market has begun to strengthen the regulation of information disclosure related to the epidemic. A well-known broker of Southern China investment bank said that feedback from the regulatory authorities on mergers and acquisitions did not force the disclosure of the impact of the new crown pneumonia epidemic. However, many enterprises would voluntarily disclose that the main contents include the impact on the profit of the forecast period and the analysis of the production and operation of the target company.

According to incomplete statistics of the twenty-first Century economic report, as of now, the audit opinions on mergers and acquisitions of well-off shares, the licensing reorganization of Sino color shares, and inquiry letters have all been disclosed by the regulatory authorities to reveal the related impact of the epidemic.

Failure to restructure enterprises consider reboot

Earlier, in order to improve the company's continued profitability, the company started the restructuring and transformation of Hongyu new material. The announcement was terminated because of the epidemic situation.

In November 2019, Hongyu new material, which faced the risk of suspension of listing in 2017 and 2018, launched a major asset restructuring process. It intends to buy platinum's 75% stake through issuing shares and paying cash, with a transaction value of 631 million yuan.

But only 5 months after planning, the restructuring stopped abruptly.

Hongyu new material pointed out that due to the impact of pneumonia caused by the new coronavirus, the target company is expected to have significant uncertainties in its performance commitments in 2020 and 2021. The company and the reorganizing parties carefully studied and decided to terminate the issue of shares and pay cash to purchase assets and raise matching funds and related transactions.

Public information shows that platinum is a provider of mobile Internet services and smart terminals. The main business is mobile Internet services such as integrated design, application distribution, APP installation and advertising promotion of smart terminals, with a net profit of 39 million 851 thousand and 900 yuan in 2018. The counterparty has promised that the net profit of 2019 to 2021 will be no less than 70 million yuan, 91 million yuan and 118 million yuan respectively.

In March 18th, Hongyu new material Securities Department responded to the economic report of twenty-first Century by calling investors. "This is the other shareholder's difficulties in the company's performance in the future, and it is difficult to voluntarily submit its performance commitments." The impact of the epidemic on their performance is still very large. Several major customers were eventually transmitted to the target company under the influence of the epidemic. We terminated the reorganization from the perspective of prudence and guarding against goodwill and other risks.

However, the above Hongyu new material securities department also said that the company still has to consider the transformation. As to whether it is the acquisition or other aspects of operation (promoting transformation), no information has yet been received. If there is any new trend, it will be announced in time.

Coincidentally, on the same day when Hongyu new material announced the failure of reorganization, another local listed state owned construction and investment energy also terminated the planned acquisition of assets for up to 17 months.

At that time, the Hebei construction investment group, the energy holding shareholder of the construction investment group, aims to solve the problem of competition in the same industry, and intends to inject 45% equity interest in its Cheung Wan company and 40% stake in Qinhuangdao Qin heat power generation into the system of listed companies.

But the final restructuring failed because of the new crown pneumonia epidemic. Construction investment energy pointed out that the transaction lasted for a long time, during which the external environment changed, especially in the near future, affected by the new crown pneumonia epidemic situation, the macroeconomic situation and market environment pressure increased, the company decided not to continue to issue shares to buy assets to promote the transaction. "

Because time is relatively long, the external environment is relatively large, and because of the impact of the epidemic, the target company we want to acquire is not very profitable. Because the transaction needs negotiation between both sides, the holder is not willing to sell at a low price, but the listed company also has its own consideration. " The Ministry of investment and energy Securities said to the twenty-first Century economic report reporter who called the investor.

According to the source of the Ministry of energy and securities, it will consider restarting the takeover. The background of the purchase is to solve the problem of competition with major shareholders. "When the reorganization was made in 2013, the major shareholders promised that the same type of assets should be gradually injected into the listed companies and wait until the right time to do so."

Opportunities for mergers and acquisitions looming

The performance of the two listed companies may be just a corner exposed under the shadow of the epidemic. According to incomplete statistics from reporters, Cathay Pacific Group, ST East Ocean, Jim, Ma Ma technology, Tang Dynasty god and other companies in the interactive investor Q & A, investors are also targeted at the completion of the performance of the acquisition target under the impact of the epidemic, and questioned the listed companies.

Recently, regulators have increased the demand for the impact of the epidemic. In the feedback from the Securities Regulatory Commission and the exchange, many enterprises such as China Construction and Sino equity companies have been asked to improve the situation that the underlying assets are affected by the epidemic.

So, before returning to the Shenzhen Stock Exchange to reorganize the inquiry letter, he said that during the verification process, the influence of the new coronavirus epidemic situation and the internal seal process of financial institutions had not yet obtained the written consent letter of other creditors related to the reorganization transaction, and there still existed the risk of early repayment of loans.

But on the other side of the uncertainty, opportunities for mergers and acquisitions are also brewing.

Insiders pointed out that the outbreak or mergers and acquisitions to accelerate the fuse, on the one hand, the epidemic forced the performance of enterprises under pressure, the sale will increase, on the other hand, refinancing policy to relax the good capital side, the listed companies usher in mergers and acquisitions to integrate the industrial chain.

The investment banking department pointed out to reporters: "we have some business customers originally intended to IPO, but because of the impact of the epidemic, some enterprises' performance may not meet the requirements of IPO, so they want to choose mergers and acquisitions, especially television, tourism and other non rigid consumer industries, and some enterprises' performance decline is very serious."

A Shenzhen semiconductor industry non-listed company also told reporters that because of the impact of the epidemic, some companies on the upstream and downstream businesses suffered from the crisis of capital chain, many of which were high quality targets. The company was looking for M & A opportunities in the upstream and downstream industries chain.

It is worth mentioning that, with the global outbreak of the new crown pneumonia epidemic, some market participants predict that overseas assets will be more "cheap" and seek overseas acquisition opportunities. (Editor: Wu Yan Ling)

?