Case playback:
A International Group is the United States of America's biggest insurance company, affected by financial crisis, is on the verge of bankruptcy. For the repayment of massive government bailout funds, in 2010 March announced the sale of the subsidiary company, B Limited by Share Ltd to the British C Insurance Co. ltd.. Trading on the price of 500000000, including: 000000000 in cash, 500000000 of C shares and convertible bonds. Some shareholders C thought the price was too high, says he will vote at the shareholders meeting. In May 28th, C company management layer under pressure from shareholders, to restart negotiations with the A, tried to reduce the price to 400000000. A is expected B spin-off also raised corresponding funds, thus rejected C's bargain. In June 2nd, C announced its withdrawal from the company restructuring negotiations.
Intensive analysis:
Restructuring is the core of value discovery and value, the fundamental goal of restructuring strategy is to maximize the value of entrepreneurship. If the restructuring caused by the venture value increase in value over the reorganization of the transaction value, the reorganization strategy is an effective strategy. Therefore, the reorganization of the transaction price is the starting point of the recombinant feasibility analysis and the fundamental basis, the transaction price is reasonable or not directly related to the reorganization of the level of risk. But as the starting point, the reorganization of the parties information degree and different evaluation methods, the existing valuation results some differences between recombinant standard. If no agreement is reached through negotiation, the recombinant collapse is the inevitable result.
The termination of the reorganization will not only lead to the reorganization of the parties economic, reputation losses, and may even lead to litigation and administrative punishment. Such as, the laws and regulations of our country, in the process of transfer of state-owned property rights of enterprises, transfer, the transfer target enterprise and the transferee commits one of the following acts, the state-owned assets supervision and administration institution or enterprise state-owned property rights transfer relevant approval offices shall require the transferor to terminate the property transfer activities, shall file a lawsuit to the people's court according to law, confirmation of the transfer act invalid: the transferor, the transfer target enterprise deliberately concealed shall be included in the scope of the assessment of the assets, or provide false accounting information to the agency, which causes the distortion of audit, evaluation results, and without the audit, evaluation, resulting in the loss of state-owned assets; the transferor and the transferee collude, low-cost transfer of state-owned property rights, caused the state the loss of assets; the transferee by means of fraud, concealment and other contract to transfer the transferor selection and signing the property right; the transfer of property rights bidding, auction, malicious collusion with low prices, resulting in the loss of state-owned assets. Persons in charge directly responsible for the above behavior of transfer, the transfer target enterprise and other directly responsible personnel, by the state-owned assets supervision and administration institutions or enterprises to give a warning in accordance with the personnel management authority, if the circumstances are serious, shall be given a disciplinary punishment, cause state-owned assets losses, shall be liable for compensation; the transferee's responsibility result in the loss of state-owned assets, the transferee shall make compensation for the transfer of the economic loss according to law; constitute a crime, shall be transferred to the judicial organ for investigation of criminal responsibility.
Small state-owned enterprises for sale, the seller of the assets and liabilities, the sale of the enterprise profit and loss situation and other major matters not to perform such obligation, affect the enterprise the sale price, the buyer may claim compensation.
In this case, the management level of C company from the overall business strategy of A company, to offer a higher transaction price. While C shareholders from the ownership and the rate of return on investment, that the transaction price is too high, the risk is too big. Due to changes in the external environment, in March after the A has passed the most difficult moment, reorganization of B company has more choice. Finally, the reorganization of the parties failed to reach consensus, and termination pay a high price for recombinant. Among them, C has paid 500000000 pounds over the breakup fee, a major setback for the company business strategy, long-term profitability will be affected to a certain extent; the A company paid a huge time cost, the B company to miss the best time to market.
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