Purple National Micro 18 Billion Merger Case Is Not Property Right And Goodwill Two Big "Stumbling Block" To Be Solved

In June 8th, 002049.SZ went down and closed at 66.26 yuan, down 9.11%.

Short term share price pressure of purple light country is expected in the market. On the previous night, the Commission of mergers and acquisitions of the SFC rejected the plan of the Linxens acquisition by the purple light country and made the market exclaim.

A year ago, when the 18 billion yuan acquisition was made, the market was completely different: at the opening of the market, it got a word limit and even boarded micro-blog hot search.

According to the transaction plan announced by purple light country in June 2, 2019, the company intends to purchase the 100% shareholding of violet holding company, which is owned by purple light, purple brocade, purple Jin Hai jump, Hongfeng capital and Xin Hua, through the issuance of shares, so as to indirectly control Linxens (Lixin), and the price of the underlying assets is 18 billion yuan.

In this regard, the acquisition of the market, all parties have placed high expectations.

But why did this once favored M & A case be denied? Next, will violet Guang Guo restart the merger? How to solve the two audit and opinions? In twenty-first Century, the economic report reporter interviewed many people, trying to answer the above questions.

Is the "high quality" target denied?

According to the announcement issued by the SFC's official website in June 5th, the audit opinion of the purple light country micro application for issuing shares to buy assets is that the underlying asset ownership is defective and does not conform to the provisions of the eleventh provision of the listed company's major asset reorganization management measures. Moreover, the amount of goodwill of the underlying assets is relatively large, and the applicant fails to fully explain that this transaction is conducive to improving the quality of the assets of the listed company and does not conform to the forty-third provision of the management method of the major asset reorganization of listed companies.

When the news came out, the market was in an uproar.

"Both the market and the company should be quite surprised. This is a large-scale merger and acquisition led by state-owned enterprises, and is also a chip area developed by the state. In June 8th, a market person close to the company said.

From the previous research report, the capital market looks forward to this.

If the Bank of China Securities pointed out that the company is leading technology in the field of smart security chip, it is obvious that the acquisition of the underlying assets purple light Liansheng and the smart security chip of the company have obvious synergy effect. At the same time, considering that the company has a deeper layout in the field of FPGA, the growth space will be larger, and the first coverage will be given the "buy in" rating.

Southwest Securities Research and research report also analyzed the significance of M & A to the micro and chip industry of China from the aspects of industrial policy, merger and reorganization policy, domestic substitution, Industrial Synergy and the status of the target industry.

Zeng Guang Guo has said in a transaction plan that after the completion of the transaction, ZT will achieve the integration of upstream and downstream. It can also provide intelligent security chips and micro connector design and sales, provide independent and controllable intelligent safety chip module, and provide independent and controllable safety guarantee for domestic government agencies, state-owned enterprises and key areas. The listed company will realize the layout of "safety chip + intelligent connection", and build a more complete intelligent safety chip industry chain.

Many market participants told reporters that the underlying assets are indeed of high quality.

Public information shows that Linxens group's main business is focused on micro connectors, RFID inserts and antennas. The RFID inlay and antenna products industry ranks the top in the world. In 2018, its micro connector products accounted for more than 50% of the market share of Telecom connector application terminals and the market share of bank card terminals.

"Linxens is a smart card connector, and has synergies with upstream and downstream products. The market also has complementarity. The main business of the company is overseas. The company will expand overseas smart security chip business to enhance its market share and global competitiveness. Linxens can also rely on the company to open the domestic market. An electronic industry analyst told reporters.

"Stumbling block" to be solved

"Chip", "self controlled", "domestic alternative"... The merger has been labelled many times. In recent years, the national policy has strongly supported the development of integrated circuit industry. In the case of listed companies, it can also achieve industrial synergy. Why is it that the seemingly perfect acquisition case is not?

The SFC's audit opinions are mainly focused on asset ownership and goodwill. Twenty-first Century economic news reporter noted that the two audit opinions were the focus of the CSRC's feedback.

For the defects of asset ownership, the SFC's two feedback shows that the transaction still needs loan syndicate agreement and has not yet been obtained. According to the relevant loan and pledge agreement, the main asset of the underlying entity is France Lully. All the shares of A are still in pledge. The premise of the lifting is that the pledgor provides the form and value of other guarantees that the import and export bank is satisfied with and completes the registration and filing rights guarantee measures. The parties to the loan agreement are still communicating and coordinating the above matters.

Regarding this, purple light country micro replied that purple capital promised to obtain the consent of the syndicate for the transaction before the SFC's merger and reorganization committee reviewed the transaction, and the listed companies and other parties promised not to implement the transaction before the consortium agreed.

For goodwill, purple national micro said that the acquisition will not form new goodwill, but because Linxens group itself has experienced many mergers and acquisitions and mergers and acquisitions in the past, there is a large amount of goodwill in the book, and by the end of 2019, the goodwill amount was 14 billion 371 million yuan.

The aforementioned market participants believe that these two points are not fatal problems. "Property rights can be smoothed through supplementary agreements. The problem of goodwill can be reduced by deducting the shares of purple light group and reducing the consideration price. Only this kind of treatment needs to re open the board of directors, modify the plan, and the time is longer, maybe 2-3 months later will continue to advance.

However, a senior investment bank in Shanghai believes that the first issue is more critical.

"Creditor consent is a prerequisite for transactions and directly affects the ownership of assets. High reputation is not a problem that must be solved. It can fully demonstrate the future development space and potential, and prove that the risk of impairment is not large. It should be acceptable.

Market participants generally speculated that the possibility of the company's resumption of mergers and acquisitions is higher.

In view of the latest development of the merger and acquisition. In June 8th, Zi Guang Guo Wei Du Linhu, an empress in the mail, replied to the twenty-first Century business reporter. "There is no further response from the listed companies to the market."

At the same time, Du Linhu said, "although the company's major asset reorganization application has not been passed, the decision will not affect the actual operation of the company and the Linxens group. Both sides, as the enterprises under the purple light group, still have natural advantages in business cooperation and seeking synergy. The two sides will continue to explore and deepen relevant cooperation. " (Editor: Wu Yan Ling)

?