"If you want to wear the crown, you must bear its weight." This famous saying from "Hermann and Paul" not only reveals the difficulties and dangers behind power, but also aptly summarizes the true meaning of the struggle for control of listed companies. In the torrent of the capital market, the struggle for corporate control seems to be a war without gunpowder. Every moment of power may be accompanied by a fierce game of funds, shareholders, laws and public opinion.
American Goheal M&A Group
As a contender for the control of listed companies, time is often the most important resource. In these competitions, some investors and entrepreneurs can achieve "power exchange" in just 30 days with efficient capital operations and flexible legal strategies. As an industry-leading M&A consultant, Goheal has personally participated in many major M&A cases and deeply understands how to cleverly use the dual power of capital and law in this process to achieve rapid and efficient control. This article will analyze in detail the five deadly weapons in the struggle for control of listed companies and reveal to you how to quickly obtain control of listed companies within 30 days.
1. Reconstruction of equity control: from "proportional hegemony" to "article customization"
In the process of competing for control of listed companies, equity control is still one of the most direct means. Under the traditional model, a 67% equity ratio can achieve absolute control - whether it is through amending the company's articles of association or voting on major matters, you can have the final say. However, with the gradual maturity of the capital market and the refinement of regulations, it is increasingly rare for some controlling shareholders to rely on their proportional advantages in shareholders' meetings to control company decisions.
For example, a listed company originally held 90% of the shares by a single shareholder, but due to some special clauses embedded in the articles of association, the shareholder failed to occupy a controlling position in key decisions. This "penetrating defense" mechanism of the articles of association reveals that equity control is not omnipotent, and how to "cleverly customize" through the design of the articles of association has become the key to victory.
A more flexible equity control strategy is to increase holdings through surprise. Breaking through the 5% holding line through block trading or agreement transfer, combined with voting rights delegation and concerted action agreements, can quickly break through the voting rights restrictions in shareholders' meetings and greatly enhance control. For example, Suzhou BBK successfully gained control of Daqian Ecology through 18.09% of the shares. In this type of operation, Goheal helps clients achieve "instant movement" of company control through precise capital analysis and shareholder structure optimization.
2. Board seat blitz: double game of denominator and numerator
In the battle for voting rights at the shareholders' meeting, the board seat is often the key to determining the ownership of control. Through the strategy of "temporary shareholders' meeting raid", shareholders with more than 3% of the shares can forcibly convene a shareholders' meeting to re-elect board members. For example, in the battle for control of Vanke, the Baoneng Group used this strategy to propose the removal of all current directors and directly challenged the governance structure of the original controlling party.
Faced with such a challenge, the original controlling party is not helpless. They can often delay the rhythm of the battle by filing a procedural lawsuit to freeze the effectiveness of the resolution of the shareholders' meeting. For example, Anhui Technology successfully delayed the convening of the interim shareholders' meeting through civil litigation, and finally gained precious time to stabilize the company's control.
At the same time, binding the nomination rights of small and medium shareholders through a concerted action agreement and breaking through the 3% nomination threshold of a single shareholder is also one of the common means in the process of seizing power. The founder of BlueFocus signed an agreement before the listing and achieved control of the board seats through a concerted action agreement. In the reverse operation, the lawsuit of "breach of fiduciary duty" also created a legal basis for the removal of board members.
3. Voting leverage: a deadly combination of agreement tools and financial derivatives
The voting leverage strategy is an efficient weapon in the battle for control. Through the method of "voting rights delegation + income rights stripping", the acquirer can obtain control of the listed company in a short period of time. For example, Evergrande entrusted the voting rights of Vanke shares to Shenzhen Metro, thereby quickly realizing the influence on the company's major decisions. At the same time, the acquirer can realize the assets while retaining control over corporate governance through the model of "income rights ABS + voting rights retention".
Another way is to provide investors with a differentiated voting rights structure through the design of AB share structure. For example, during the revision of the articles of association, by establishing a special voting right of "1 share 10 votes", the acquirer can successfully achieve dominance over the company's decision-making through a simple 2/3 vote at the shareholders' meeting. Although this structure violates the principle of equal rights for equal shares in the Company Law to a certain extent, legal risks can be avoided by establishing structures such as limited partnership holding platforms.
4. Litigation sniping: disintegrating entity control with procedural justice
In the process of competing for controlling rights, litigation is not only a legal tactical tool, but also an efficient means of power game. Through the first move of "behavior preservation", the hostile acquirer may encounter legal obstacles at the node of increasing key equity. For example, when the enemy increases its holdings, the acquirer can temporarily block the enemy's acquisition process by applying to freeze the enemy's voting rights.
At the same time, shareholder representative litigation is also an effective tactic. By accusing the original controlling party of damaging the interests of the company and forcing it to transfer governance rights, the acquirer can force the existing controlling party to withdraw through litigation deterrence. For example, by pursuing the original controlling party's related-party transaction liability and illegal guarantee liability, it is forced to withdraw from the board of directors and successfully realize the transfer of control.
5. Capital defense: three-dimensional defense of poison pills and white knights
In the face of hostile acquisitions by the enemy, listed companies can also counter by establishing "dynamic poison pills". By issuing additional shares at a low price or accelerating debt maturity, the acquirer's equity ratio will be diluted in an instant, making it impossible for its acquisition plan to proceed.
In addition, the White Knight's targeted transfusion can also effectively prevent hostile takeovers. By issuing shares to friendly parties at a premium, the original controlling party can obtain much-needed financial support and resolve acquisition risks in a short period of time. For example, Vanke successfully resisted the acquisition of the Baoneng Group by introducing financial support from Shenzhen Metro. It is worth noting that this targeted issuance of additional shares needs to comply with the relevant provisions of the "Management Measures for Acquisition of Listed Companies" to ensure the compliance of the issuance pricing and lock-up period.
Conclusion: Time and Strategy in the War of Power
The battle for control is one of the most challenging and complex games in the capital market. From the battle for equity control and board seats to the use of voting leverage and litigation strategies, each strategy contains profound capital and legal wisdom. In this war full of gunpowder, time is often the key to success or failure, and how to achieve the "seizure" of control within just 30 days requires more precise strategic layout and flexible operational skills.
Goheal Group
How to quickly and accurately gain the upper hand in this power game? How to find a breakthrough in a complex capital and legal environment? These questions are worth pondering for every investor and entrepreneur. As an expert in capital operation and M&A, Goheal is always committed to providing customers with efficient and professional strategic advice to help companies stand out in M&A and control competition.
Welcome to share your views and experiences in the comment area. Let us discuss how to go further and win greater victories in this complex capital market.
[About Goheal] Goheal is a leading investment holding company focusing on global M&A holdings. It is deeply engaged in the three core business areas of listed company control acquisition, listed company M&A and restructuring, and listed company capital operation. With its deep professional strength and rich experience, it provides enterprises with full life cycle services from M&A to restructuring to capital operation, aiming to maximize corporate value and achieve long-term benefit growth.
