Privatization process of American listed companies

No matter what the purpose of privatization is, the privatization offeror should follow the prescribed procedures.

First, the offeror (usually a company executive or an external strategic investor) makes a privatization offer to the board of directors; The offer price usually has a different premium than the current share price. Judging from the above statistical cases, the premium range ranges from 10% to 100%, which is quite different.

The second step is: the board of directors will set up a special Committee, which will hire legal and financial consultants to evaluate the offer price and perform relevant procedures, conduct due diligence and issue professional opinions to the special Committee;

The third step is: the special Committee and major shareholders negotiate with the offeror on the merger price and specific terms; If the two sides reach an agreement, the Special Committee will approve the privatization offer plan and submit relevant materials to the Exchange and the SEC; ;

Finally, the company held a special general meeting of shareholders to vote. The criteria for voting will vary according to the place where the company is registered; For example, a Cayman registered company requires more than 50% of shareholders to vote, and more than 75% of the voting rights agree to privatization. (Xueda is registered in Cayman)

Characteristics of successful privatization cases

A very important reason why privatization can be passed is price; If investors do not agree with the privatization price, they will vote against or not to participate in the voting at the shareholders' meeting. If the institutional shareholders with high shareholding ratio disagree with the privatization price, the difficulty of privatization will greatly increase; Taking the privatization of Focus Media as an example, Eastspring, an external shareholder, made it clear that the privatization price should be raised from $27 to more than $30.

In addition, the firm support of the offeror cooperative consortium is also an important condition for the smooth progress of privatization; In the process of privatization, if the consortium promised to participate in it changes for some reason, it will also add many variables to the privatization process. For example, the withdrawal of Baling Asia Investment Fund Group, the original partner of Taifu Electric's privatization, made its privatization experience twists and turns, and it took 388 days to complete the privatization.

According to the statistics of privatization cases of American stocks, the sponsors of successful privatization cases generally hold a large share, and the offeror holds more than 40% in most cases; Behind it is the strong support of the consortium. Judging from the privatization valuation, most cases are above 1 billion dollars, and only the market value of China Telecom and Jingwei International is below 1 billion dollars; However, there are few cases that exceed $654.38+0 billion. At present, only one case of Shanda has exceeded $6543.8 +0 billion. If Focus Media is privatized successfully, it will be the biggest privatization case of China Stock Exchange.

Judging from the time experienced in the process of privatization, the faster company can be completed within 1-3 months, and it took only 30 days for Pearson Group to acquire Global World. Most cases can be completed within 3-9 months; Of course, some of them took more than a year to complete, such as tongjitang and Taifu Electric.