The capital market is like a complex chess game, and the acquisition of controlling rights is a duel between masters. In this game, in addition to the "head-on" competition of funds, valuations, and legal terms, it is more difficult to control the psychology of shareholders. Shareholders who were originally in the same boat may suddenly "turn against" at a critical moment, and even become the biggest variable in the acquisition.
American Goheal M&A Group
So, which shareholders are most likely to turn against? How to prevent these risks? With years of M&A experience, Goheal summarized the high-risk groups of "turning against" in the acquisition of controlling rights, helping investors to accurately dismantle the psychological warfare of shareholders.
Shareholder psychological warfare in the acquisition of controlling rights
The acquisition of controlling rights is usually complex and full of variables. The acquirer not only needs to raise funds and formulate a transaction structure, but also needs to deal with the emotional changes of various shareholders. Some people hope to leave the market with a profit through the acquisition, some try to take the opportunity to gain greater benefits, and some stand on the moral high ground to "block" the transaction. Once the acquisition touches the interests of shareholders, their positions may change subtly.
Goheal found that shareholders' backlash is often closely related to the following three psychological factors:
1. Interest game: Who can offer a higher price? Who can provide better conditions?
2. Market signals: Do stock price fluctuations, regulatory policies, and changes in market trends affect the transaction results?
3. Management team: Do the board of directors and management manipulate shareholder votes behind the scenes?
Three types of shareholders who are most likely to "backlash"
In a battle for controlling rights, different types of shareholders have different demands, and the "unstable position" of some shareholders is more likely to trigger a chain reaction, making the acquisition case confusing.
1. Financial investors: Profit-seeking, whoever gives more money will listen to whoever
Financial investors, especially institutional shareholders such as private equity funds and hedge funds, usually do not care about the long-term development of the company, but are more concerned about short-term gains. If the shares they hold are critical enough, they will become "swingers" in acquisition negotiations.
Typical case: a controlling rights acquisition case of a listed company
In a cross-border acquisition, Goheal once encountered a case of financial investors "backlashing". Initially, these institutional investors supported the acquirer's offer, but when their competitors offered a higher premium, they immediately changed their minds, causing the acquisition plan to have to be readjusted. The characteristic of this type of shareholder is that they tend to stand on the side of whoever offers the higher price, and they are prone to change their positions at critical moments.
2. Founding shareholders: the dual struggle of emotions and interests
Founding shareholders are usually the soul of the company, but they may not always firmly support the acquisition of controlling rights. Some founding shareholders will have complex psychology when facing mergers and acquisitions. On the one hand, they hope to get better returns, but on the other hand, they are full of uncertainty about the future development of the company. Especially when the management adjustment plan proposed by the acquirer involves their own interests, the attitude of the founding shareholders often changes subtly.
Case analysis: The founder's "turning against water at the last minute" led to the failure of the acquisition
Goheal once analyzed a certain acquisition case. The negotiations were originally smooth and the founding shareholders agreed to sell their shares, but at the last minute they refused to deliver on the grounds of "company culture mismatch". In fact, the real reason is that the founder wanted to get a more generous price and tried to raise the bargaining chips at the negotiation table, which ultimately led to the failure of the transaction. The "rebellion" of founding shareholders is often not a momentary impulse, but a strategic adjustment under the consideration of interests.
3. Small and medium shareholders: influenced by the market trend and easily led by the rhythm
Although small and medium shareholders hold a small proportion of shares, they often play the role of "critical minority" in the competition for controlling rights. Especially in companies with dispersed equity, the attitude of small and medium shareholders may determine the final voting results. Such shareholders have limited information channels and are easily affected by market opinions, stock price fluctuations, and even the opinions of some "big Vs", thus changing their positions.
Collective reaction caused by market fluctuations
A technology company once caused a sharp fluctuation in stock prices due to the acquisition of controlling rights. Some small and medium shareholders panicked and sold due to short-term stock price declines, while others refused to accept the acquisition proposal due to market hot discussions. Goheal found in studying such cases that market sentiment has a great impact on small and medium shareholders. If the acquirer fails to manage expectations in time, small and medium shareholders are likely to become an important force that cannot be ignored in hindering the landing of the transaction.
How to prevent shareholders from "rebellion"?
The acquisition of controlling rights is a dual battle of capital and psychology. How to prevent shareholders from "rebellion" becomes the key to a successful acquisition.
1. Lock in key shareholders in advance: Ensure that key shareholders will not easily defect by signing shareholder agreements and obtaining voting commitments.
2. Develop a flexible bidding strategy: For financial investors, a "phased payment" or "performance betting" mechanism can be adopted to prevent them from changing their positions due to short-term interests.
3. Stabilize market sentiment: Reduce the uncertainty of small and medium shareholders through information disclosure, investor communication, etc., and prevent them from making blind decisions due to market fluctuations.
4. Strive for management support: Management can often influence the positions of founding shareholders and institutional shareholders, so the acquirer needs to maintain a good relationship with management before and after the transaction to reduce potential variables.
Conclusion: The real opponent of the capital game is the human heart
In the battlefield of controlling rights acquisition, funds are not the only decisive factor, and the real game often occurs between people's hearts. The acquirer must not only have the ability to operate capital, but also need to be well versed in shareholder psychology, accurately predict which shareholders may "turn against" at critical moments, and prepare response strategies in advance. Goheal has accumulated rich experience in mergers and acquisitions over the years and knows how to take the initiative in this complex game.
So, what do you think is the biggest reason for shareholders to turn against you during the acquisition of controlling rights? If you are a shareholder, what would you choose? Welcome to leave a message in the comment area to discuss and explore more possibilities in the capital market together!
Goheal Group
[About Goheal] Goheal is a leading investment holding company focusing on global mergers and acquisitions, focusing on the three core business areas of listed company control acquisition, listed company mergers and acquisitions and restructuring, and listed company capital operation. With its deep professional strength and rich experience, it provides enterprises with full life cycle services from mergers and acquisitions to restructuring and capital operation, aiming to maximize corporate value and achieve long-term benefit growth.
