Lang Lang

The decisive battle will take place in 11 days. At this time, Huang Guangyu and Chen Xiao are silently scraping and collecting ammunition. The two former heads of Gome Electrical Appliances, since the public breakdown on August 5, have locked the date of the decisive battle after August 25.

According to the 21-day deadline given by the Huang Guangyu family on August 4, the Huang family, as the major shareholder, is likely to convene a special shareholders' meeting after August 25 to reorganize the Gome Board of Directors and remove Chen Xiao. , and revoked the general authorization given by shareholders to the board of directors to issue an additional 20% of shares.

As the chairman of Gome’s board of directors, Chen Xiao not only wants to retain the position of the senior management team represented by himself, but also gradually expels Huang Guangyu and his family’s power from Gome.

For both sides, this is a life-and-death struggle. It will be related to who will control the largest home appliance distribution channel in China, and will affect the future of Huang Guangyu, Chen Xiao and even Gome.

Whether Gome will return to the Huang Guangyu era or step into the Chen Xiao era is also related to the dispute between Gome's two routes: whether to follow the scope-first route advocated by Huang Guangyu - first to expand at a high speed, and then to form a counterattack Should we go back and improve efficiency after the competitors are absolutely suppressed? Or should we follow the efficiency-first route advocated by Chen Xiao and focus on improving the profitability of existing stores?

This battle over strategic decisions affects the profits of investors on one end, and the future fate of the huge Chinese electronics industry behind Gome on the other - it will continue to face iron-fisted, cunning, Huang Guangyu, a talented person from Chaoshan who maintains a long payment settlement cycle, or is he facing Chen Xiao, a Shanghai manager who looks peaceful and elegant and has devoted himself to improving relations with manufacturers in the past two years?

All this will be announced after August 25th.

PK of support votes

Institutional investors will play a major role in the special general meeting of shareholders. We have currently communicated with a number of institutional investors and after considering the opinions of all parties It is believed that there will be enough investors to support the major shareholder's motion at the extraordinary general meeting, so Chen Xiao's elimination is inevitable. Representatives of Huang Guangyu’s family said in an interview with this reporter.

In this regard, Chen Xiao did not reply. Instead, Sun Yiding, vice president of Gome Electrical Appliances in Chen Xiao's camp, replied on August 12 that such a situation was impossible.

While talking, Chen Xiaoyang also stepped up his efforts to canvass votes among institutional investors.

The investor relations department of Gome Electric Appliances has been communicating with institutional investors, and the scope of communication even includes some actual investors who hold shares on behalf of institutional investors such as Morgan Stanley. Bain Investment insiders, another party to the incident, revealed that fundamentally, investors are satisfied with the company's current performance. Under such circumstances, why should it change?

Both sides showed great confidence in the 8-25 decisive battle. For Huang Guangyu, the most powerful bargaining chip to obtain more than 50% of the votes at the special shareholders' meeting is the 33.98% voting rights he holds (reduced to 29.8% after Bain's share transfer), and Huang Guangyu's agent Will definitely attend.

This means that Huang Guangyu only needs to get 20.2% more votes to win. For Chen Xiao and Bain Investment, even if Bain Investment completes the convertible bonds before the shareholders’ meeting ( CB)'s share transfer, the total equity owned by both parties is only 12.27%. If Chen Xiao wants to avoid being eliminated, he must win another 37.74% of the votes and ensure that all investors who support him participate. Someone close to Huang Guangyu’s family said.

This person gave an example: At the annual general meeting of shareholders on May 11 this year, the voting rate of shareholders at that time was only 62.5%, and Zhu Jia, Wang Lihong, and Ian Andrew Reynolds were voted separately. With 54.65%, 52.68% and 52.68% opposing votes, these three candidates nominated by Bain Investment failed to be elected as non-executive directors.

But Chen Xiao also has his own confidence.

The voting results presented at the annual shareholders’ meeting on May 11 were due to the fact that several important institutions did not participate in the voting at that time, and Bain Investment only had 0.2% of the voting rights before the debt-for-equity swap, Chen Xiao told reporters, but almost all public shareholders and other participating institutional shareholders sided with us.

If Bain Investment plans to complete the debt-for-equity swap on August 25, its shareholding ratio will increase to 10.8%. A senior executive of Gome Electric Appliances said that even if several important institutional investors 8 If you are not present on March 25, the support of Bain Investment, Chen Xiao and public shareholders can still veto the motion of the major shareholders.

Of course, in order to ensure success, Chen Xiao and Bain Investment also need to communicate with Morgan Stanley, JPMorgan Chase and Fidelity Fund. A Gome Electrical Appliances insider told this reporter on August 13 that, in fact, These institutions are also the investment managers of many public shareholders. This is why the shareholding ratios of Morgan Stanley and others change almost every day. The increase in holdings of Morgan Stanley and JPMorgan Chase in the past two days shows that the investors behind these two institutions have a strong interest in Gome. Appliances has the support of its current board of directors and management.

Some news sources said that for Chen Xiao, who has had close contact with foreign businessmen since his listing in 2005, his relationship with foreign-funded institutions is more familiar than that of Huang Yanhong and Huang Xiuhong of the Huang Guangyu family, among which Morgan Stanley is more familiar. After the merger of Yongle and Gome, the former shareholders of Yongle were transformed into shareholders of Gome Electrical Appliances. This origin laid the foundation for Chen Xiao to compete for the support of foreign shareholders.

Among the non-executive directors of Bain Investments, Zhu Jia was the managing director of the investment banking department of Morgan Stanley Asia and the chief executive officer of China business before joining Bain in 2006, and participated in the listing of Yongle Merged with Gome Yongle, and Wang Lihong also served as executive director of Morgan Stanley from April 2005 to July 2006. He previously worked at JP Morgan Asia Pacific. This shows that Chen Xiao, Bain Investment and Morgan Stanley, JPMorgan Chase, etc. Partnerships with institutional investors.

At the same time, Chen Xiao also has his own advantages in front of institutional investors who put investment return rate first.

On August 23, Gome Electrical Appliances will announce the 2010 semi-annual report, which will be significantly increased compared to the same period last year. In the next two days, it will conduct roadshows with institutional investors in Hong Kong and other places. In addition, Gome Electrical Appliances has recently Haier, LG, Sharp, etc. have successively signed large orders, and worked with McKinsey to formulate a new five-year plan. These carefully planned schedules on the eve of August 25 will help Chen Xiao’s team gain support from institutional investors.

Sun Yiding said that for institutional investors and public shareholders, these represent the future of Gome Electrical Appliances. If there are personnel changes in the existing management and board of directors, some foreign-funded institutions may choose to sell off Gome. .

The reporter learned that after the announcement on August 5, six investment banks including Merrill Lynch and Citigroup released research reports on Gome Electrical Appliances. Except for Credit Suisse’s recommendation to sell, most of the others chose to increase their holdings. , and among the three institutions with a shareholding ratio of more than 5%, only Fidelity Fund chose to reduce its holdings.

The most important thing is that Chen Xiao and the board of directors of Gome Electric Appliances have won the support of public shareholders. The voting results on May 11 have shown that Chen Xiao and Bain, who only have 1.67% of the shares, won the final vote rate. It has reached close to 50%, which means that almost all public shareholders side with Chen Xiao.

Some small shareholders of Gome Electric Co., Ltd. said that for the small and medium-sized shareholders of Gome Electric Co., Ltd., Huang Guangyu’s actions in the past six years can be said to be too numerous to describe. The continuous reduction of holdings for cash once made Gome Electric Co., Ltd.’s stock price stagnant. In early 2008, In addition to reducing the capital of listed companies, high-level buybacks have also trapped many small and medium-sized shareholders. Personal violations have caused Gome Electric to suspend trading for more than half a year and its stock price has plummeted. How can such a large shareholder obtain the support of small and medium-sized shareholders?

In fact, after more than a year of adjustments, Gome’s share price rose to a high of HK$2.79 before the trading suspension on August 5, and even exceeded HK$3. This means for public shareholders Income, but now it has been adjusted to HK$2.34, which means a loss. Obviously public shareholders hope that Gome Electric Appliances will get back on track as soon as possible.

Obviously, for Chen Xiao and Bain Investment, which are at a disadvantage in shareholding ratio, if they want to win the vote on August 25, the support of public shareholders with a shareholding ratio of more than 25% is crucial. In addition, the battle for votes from institutional investors is also very important. Even if they insist on neutrality, Chen Xiao and Bain will have greater certainty.

Public Opinion and Rationality

Although Chen Xiao and Bain Investment have greater hope of getting more votes, the public opinion offensive launched by the Huang Guangyu family recently is equally fierce, which puts the balance of success in the balance. There have also been some minor changes.

The Huang Guangyu family recently stated through the media that the board of directors of Gome Electric Appliances, headed by Chen Xiao, has been misleading the public and has covered up the listed company by closing more than 300 stores below the average in the past year. Reports, and even accepted harsh conditions in the process of introducing Bain investment, the purpose is to control Gome Electrical Appliances.

Although five senior executives of Gome Electric Appliances made a collective appearance on August 12 to analyze how management brought Gome Electric Appliances back from the edge of bankruptcy in the past 19 months and the objective reasons for the introduction of strategic investors, Compared with other institutional investors, Bain Investment is the only strategic investor committed to safeguarding the interests of original shareholders.

Obviously, the important management of Gome Electric Appliances is on the side of Chen Xiao, and several vice presidents such as Sun Yiding and Mou Guixian have also expressed their determination to advance or retreat from the board of directors. This is obviously very important to Chen Xiao. A senior executive of Gome Electric Appliances said that this means that if the voting result on August 25 is unfavorable to the current board of directors, the senior management team of Gome Electric Appliances may choose to resign collectively, which is obviously a major blow to the Huang Guangyu family. Since the Huang Guangyu family does not have the talent to manage listed companies, and for institutional investors, Gome's management team is obviously the biggest investment factor.

The reporter learned that although the Huang Guangyu family had his brother-in-law Zhang Zhiming as the president of the company before, due to the deterioration of the relationship with Huang Guangyu, it is unlikely that Zhang Zhiming will return to take charge of Gome Electric Appliances, and he once served as Gome Electric Appliances. Huang Xiuhong, the general manager of Shanghai Region, has limited talents, and now he has to shoulder the heavy responsibility of all Pengrun Investments. Zou Xiaochun, who was nominated as executive director this time, is only a master of capital operations and knows nothing about the management of listed companies.

It is for these reasons that the Huang Guangyu family did not mention reorganizing the management when they proposed the motion, nor did they propose to remove President Wang Junzhou and Vice President Wei Qiuli from their positions, and even retained Executive Vice President Sun Yiding Although Huang Guangyu was not satisfied with the management option incentives implemented by Chen Xiao in July last year, Huang Yanhong recently stated that he no longer opposed the equity incentives. Obviously, the Huang Guangyu family also hopes to ease the relationship with the management and pull the management back. Return to your own ranks.

Obviously, the Huang Guangyu family’s calculations have failed. If the management chooses to advance or retreat with Chen Xiao***, then even if the Huang Guangyu family wins the shareholders’ meeting vote, what it will get is a person who has lost its soul. The empty shell of Gome Electrical Appliances. An insider from Gome Electrical Appliances said so.

Obviously, the Huang Guangyu family has lost another round in the battle for governance. However, online public opinion is almost overwhelmingly supportive of Huang Guangyu. In this regard, Lu Renbo, deputy secretary-general of the China Electronics Chamber of Commerce, said, In the minds of many young people, Huang Guangyu is an entrepreneurial hero with legendary experience. Now that Chen Xiaolai has shaken his idol status, many people will naturally stand up to speak for Huang Guangyu.

Many netizens even likened Chen Xiao and the executives who supported Chen Xiao to traitors. In this regard, an executive from Gome Electric said that in traditional Chinese morality, there must be the way of a monarch and his ministers. The same is true in company management. In the eyes of many netizens, the rebellion of the management headed by Chen Xiao obviously violated the morality of being a courtier, but this is obviously not a rational approach.

In addition, many netizens in China are fanatical patriots and have always resisted foreign capital’s control of national industry and trade. This time, the combination of Chen Xiao and Bain Investment will allow the Huang Guangyu family to Being out was seen by many netizens as inviting a wolf into the house. Many netizens called for a boycott of Chen Xiao and Bain's investment in Gome Electric. Some netizens even said that 10% of the equity would only appoint three non-executive directors. According to this ratio, the Huang Guangyu family should Assigning 9 directors, it is obvious that Chen Xiao and Bain have behind-the-scenes transactions.

Gome Electric’s management is unwilling to respond to the one-sided online public opinion. An executive said that running a business requires rationality and cannot just rely on emotions. It can be said that those who scold the management are definitely not Gome Electric. Investors, because as an investor, you must look at the company's performance, not who the company belongs to.

He also said that public opinion does not represent votes, and investors' votes are the most important thing for Gome's management.

Relevant people from Bain Investment also said that this company is no longer a private company (Huang Guangyu's), but a listed company. Huang Guangyu only occupies 30% of the shares, and 70% of the shares belong to other people. It is impossible for Guangyu to manage Gome Electrical Appliances as a family business.

Future War Situation

Although the annual general meeting of shareholders has not yet been held on August 25, the battle between the protagonists of the story has already gone on for several rounds. From the current point of view, regardless of Whether it was the number of approval votes or the support rate of the management, Chen Xiao's side had the upper hand, while the Huang Guangyu family only gained the support of online public opinion and had a fixed 33.98% voting power.

Gome Electrical Appliances insiders said that if the current situation is followed, the Gome Electrical Appliances board of directors will have greater hope of winning at the shareholders' meeting, but the Huang Guangyu family will never give up, and they will definitely have backup plans next. .

As for Huang Guangyu’s back-up, some industry insiders said that Huang Guangyu also owns 100% of the equity of more than 300 unlisted stores. Although he had previously promised to give priority to selling to listed companies before the end of 2011, However, once it completely falls out with the board of directors of Gome Electrical Appliances, its promises will likely not be fulfilled, and Gome Electrical Appliances' trademark application may also be withdrawn.

In this regard, Chen Xiao said that in fact, Gome Electric’s listed stores and unlisted stores are managed by a team. If the major shareholder wants to split it up, it lacks a sufficient management team, and it will be like a conjoined store. If the two parts of the baby are cut, the listed stores with better profitability will definitely grow faster, while the non-listed stores may gradually shrink.

Under such circumstances, the Huang Guangyu family may also choose to inject the unlisted company into the listed company to increase its controlling stake. Chen Xiao has already prepared for this. He said that the unlisted company will partially enter We welcome listed companies, but listed companies will definitely buy them in cash and will never accept stock exchange.

Some Gome executives even said that with Gome's current management capabilities and management team, even if it does not use Gome's trademark, it will soon realize a brand switch, and it will definitely not be seriously damaged.

Obviously, Huang Guangyu can use a backup plan. Chen Xiao and the management of Gome Electric Appliances have prepared countermeasures. According to Chen Xiao, Huang Guangyu can be eliminated next, such as through additional issuance. Or refer to the Sina model to promote management control.

However, it is not difficult for Chen Xiao and the management of Gome Electric to survive the big test on August 25, but it is very difficult to completely eliminate the Huang Guangyu family.

According to the general authorization passed by the annual shareholders of Gome Electric Appliances to issue an additional 20% equity, if the Huang Guangyu family cannot come up with funds to participate in the additional issuance, but Bain Investment and the management of Gome Electric Appliances, which have already promised to increase capital, will participate. , the total share capital of Gome Electric Appliances will increase from the current 15 billion shares to 18 billion shares, while the holding ratio of the Huang Guangyu family, which holds 5 billion shares, will drop to about 27.7%.

Chen Xiao, who then controls the board of directors of Gome Electric Appliances, can issue an additional 20% every year to gradually dilute the equity of the Huang Guangyu family. Five years later, the total share capital of Gome Electric Appliances will be increased to 43.2 billion shares. Huang Guangyu The family's holding ratio will be reduced to 11.5%, obviously its influence will be greatly reduced.

According to Sun Yiding, Gome Electric’s future additional financing is to achieve its new five-year plan, which aims to open 2,000 stores and dozens of large logistics bases.

Obviously, foreign investment institutions including Bain Investment will continue to increase their capital during this process, so the exit of the Huang Guangyu family is inevitable. However, how much funds the Huang Guangyu family still has is currently unknown. question.

The reporter learned that after Gome Electric went public in 2004, Huang Guangyu cashed out more than 18 billion yuan, but a lot of his funds were invested in real estate, and he invested huge sums in the process of winning Zhongguancun Technology. After its accident, Pengrun Investment, led by Huang Xiuhong, sold a lot of land and other round-trip funds. However, in early August last year, it participated in the holding and also spent HK$549 million. This time the lawsuit fine was as high as 800 million yuan, and 1.655 billion was frozen in Hong Kong. With assets of HK$100 million, it is impossible to calculate how much money it can come up with in the future.

Before Huang Guangyu participated in the rights issue of Gome Electric Appliances in August last year, he first significantly reduced his holdings of 235 million shares (approximately 10% of the existing shares) through the secondary market at a price of HK$1.705 per share on July 20. Issued shares (1.84%) with a total capital of approximately HK$400 million, and later participated in the rights issue. This shows that the Huang Guangyu family does not have enough silver bullets.

Some Gome executives said that the Huang Guangyu family should still have funds, but it is impossible for them to participate in the additional issuance led by Chen Xiao and Bain Investment.

The battle between Huang Guangyu’s family and the board of directors of Gome Electric Appliances has begun. The special shareholders’ meeting on August 25 will be a decisive battle. Some insiders of Gome Electric Appliances said that there is little help for the unrighteous. This meeting should be the beginning of the complete elimination of the Huang Guangyu family.