After more than three months, Huacan Optoelectronics (300323, SZ) cross-border M&A cases have revived. On November 17, the company announced that it had received the "Notice of China Securities Regulatory Commission Administrative License Application Restoration Review".
The matter of this review is the cross-border merger and acquisition of listed companies. This is a complicated design curve acquisition: Huacan Optoelectronics intends to make a price of 1.65 billion yuan, through the bridge of harmonious optoelectronics, complete the 100% equity acquisition of MEMSIC, and raise matching funds not more than 200 million yuan.
"Daily Economic News" reporter found that many of the parties in the matter are inextricably linked with IDG Capital. If the transaction is completed, the proportion of Huacan Optoelectronics controlled by IDG will reach 23.03%, far exceeding the ranking. The second shareholder's shareholding ratio of 12.08%, if the consideration of the shareholder decision-making power of Harmony Corelight is taken into consideration, it is only one step away from the status of the real controller of the listed company.
IDG Capital plays a three-way role
For Huacan Optoelectronics, the acquisition is full of twists and turns.
Since the suspension in April last year, the acquisition has been planned for more than a year, and it was announced in early August. This is a relatively complicated merger design, the standard bridge of the company's harmonious photoelectric system, the ultimate listed company's target asset is 100% equity of MEMSIC.
According to Hua Can Optoelectronics’ “Report on the Issuance of Shares and the Collection of Matching Funds and Related Transactions Report (Draft) (Revised Draft)†(hereinafter referred to as the revised draft) issued by Huacan Optoelectronics on November 17, the Huacan Optoelectronics Recovery Review is as follows : It is planned to purchase 100% equity of its underlying company Harmony Optoelectronics from NSL and Harmony Corelight by issuing shares to purchase assets. Huacan Optoelectronics intends to raise matching funds to no more than 5 qualified investors. The issue price of the issued shares of the issued shares is 6.90 yuan / share. The total amount of funds raised does not exceed 200 million yuan.
The announcement shows that the underlying company Harmony Optoelectronics has no real business, and the main asset is 100% equity of the indirect holding target company MEMSIC. The transaction amount of this transaction is 1.65 billion yuan.
The "Daily Economic News" reporter noted that IDG Capital's relevant shareholders run through it, including buyers, intermediate platforms and even seller-related shareholders.
According to the announcement, Huacan Optoelectronics has no actual controller. Jingtian I and concerted parties, Jingtian II and Kai Le, hold 18.89% of the listed company and are the largest shareholder of the listed company. Jingtian I and Jietian II, Kai Le are controlled by the IDG-Accel Fund, and the actual controllers are Zhicheng and Zhouquan (as directors and controllers). According to IDG's official website, He Zhicheng and Zhou Quan are both members of the IDG Capital team. They are also members of the IDG Capital team and Yu Xinhua, Chairman of Huacan Optoelectronics.
Not only is the largest shareholder of a listed company, the “Daily Economic News†reporter found that the middle of the transaction, Harmony Optoelectronics' shareholder NSL is also related to IDG Capital's relevant shareholders. The announcement shows that NSL shareholders include 4 IDG dollar funds (86.96% of the total shareholding ratio) and PTL, while the general partners of the four IDG dollar funds are owned by He Zhicheng and Zhou Quan as directors or controllers, and the listed company's largest shareholder, Jingtian I. And Jingtian II, Kai Le constitute a concerted action relationship. Therefore, this transaction constitutes a cross-linked transaction.
It is worth mentioning that Huacan Optoelectronics needs to conduct the previous transaction, that is, Harmony Optoelectronics acquired 100% equity of MEMSIC held by MZ in cash through subsidiary TFL, and 7 IDG dollar funds (including NSL shareholders) Among the 4 IDG US dollar funds, the other 3 were withdrawn through the previous transaction design) and 24 natural persons such as YANG ZHAO held MZ 72% and 28% respectively. In other words, the asset seller in the previous transaction is also associated with IDG Capital.
Minority shareholders gain control
Why does Huacan Optoelectronics make the acquisition design so complicated, can a listed company directly cross the Harmony Optoelectronics and Harmony Corelight to directly acquire 100% of the shares of MEMSIC held by MZ?
In fact, the Shenzhen Stock Exchange has also asked about the reasons and necessity of introducing a harmonious core light, and paid attention to the background of shareholders behind the harmonious core. The inquiry letter pointed out: The report stated that Harmony Corelight has no concerted action with NSL and the existing shareholders of the listed company; one of the general partners of Harmony is the harmony and excellence, and the limited partners include Aiqi Light Control and Harmony. The main contributors to the harmony and excellence and the penetration of the harmonious number are Lin Dongliang, Wang Jingbo, Yang Fei, etc. The above-mentioned investors are all from IDG Capital or related to IDG Capital.
Huacan Optoelectronics said that the acquisition of MEMSIC's shareholder MZ is an overseas company. It is very difficult for a listed company to directly issue shares to overseas shareholders to purchase assets and obtain equity of overseas companies held by foreign shareholders. Therefore, it is necessary to have a similar harmonious core light. Investors who are optimistic about this transaction and have sufficient cash as partners will acquire the MEMSIC stake held by MZ through the establishment of a domestic SPV (such as Harmony Optoelectronics) to build an overseas investment structure (such as TFL).
At the same time, Huacan Optoelectronics did not deny the relationship between IDG Capital related investors and harmonious excellence and harmonious number, but it stressed that Harmony is under the control of China Everbright Holdings Co., Ltd. (hereinafter referred to as China Everbright Holdings) through the light control Puyi. It is not controlled by the same subject with Jingtian I, Jingtian II, and Kai Le.
According to the revised draft of Huacan Optoelectronics, after the agreement, all the partners of Harmony Corelight unanimously agreed that Guangkong Puyi and Harmony Excellence should decide the harmonious core partnership affairs according to the voting ratio of 3:2.
The revised draft shows that the first largest investor of Harmony is the Zhejiang Yiwu Industrial Park Development Co., Ltd., with a capital contribution ratio of 45.39%; Shanghai Guangkong Puyi Equity Investment Management Co., Ltd. has a capital contribution ratio of 0.07%, funded by Yixing Guangkong Investment Co., Ltd. The proportion is 36.31%; in addition, the proportion of harmonious and excellent investment is 18.16% and 0.07% respectively.
"Daily Economic News" reporter found that in May 2017, Yixing Light Control's share of the harmonious core light partnership was transferred from Aiqiguang Control, and Yixing Light Control and Light Control Puyi were under the control of China Everbright Holdings Limited. Even so, the total investment ratio of Yixing Light Control and Light Control Puyi is 36.38%, which is less than the investment ratio of Zhejiang Yiwu Industrial Park Development Co., Ltd.
It is interesting to note that according to the "Securities Times" reported on June 29 last year, the two sides jointly announced the establishment of an industrial investment fund with a total subscription size of not less than 20 billion yuan - "IDG Everbright Industrial M&A Fund", cooperation mode For the light control Puyi and Harmony Excellence jointly served as the general partner and manager of the fund; and the harmonious core business registration time is June 27, 2016, the rest of the information also coincide.
IDG capital equity ratio rose to 26.7%
The above-mentioned setting of the equity ratio of Harmony Corelight is also related to the proportion of shares held by IDG and other related parties holding Huacan Optoelectronics after the transaction.
"Daily Economic News" reporter noted that Jingtian I and its concerted parties Jingtian II, Kai Le, NSL held a total of 19.96% of listed companies without considering the fund-raising part of the fundraising, after the completion of the 1.65 billion yuan issue of the stock purchase transaction. The equity of Harmony is holding 16.86% of the listed company's shares. In this part of the equity, the harmonious majority controlled by IDG Capital and the harmonious superiority enjoy the interest of the shares is about 3.07%, which also means that the proportion of shares controlled by IDG Capital will be Rose to 23.03%.
This ratio is quite different from that of Shanghai Canrong and its concerted action, Tianfuhuan, which holds the company's 12.08% share.
It is worth mentioning that in the above-mentioned harmonious core shareholder table, Yiwu Industrial Park, the largest shareholder, does not have the decision-making power. Instead, minority shareholders decide on the related affairs of the partnership, namely, light control and harmony and excellence. : 2 vote proportional decision-making matters. This also means that, according to the decision-making equity conversion, after the completion of the transaction, IDG Capital's actual equity interest in Huacan Optoelectronics is 6.74%, IDG Capital's total equity control ratio is 26.7%, and the listed company is 30% away from the listed company. The voting right of the stock is then promoted to the actual controller only one step away.
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