shanghai stock exchange releases "mergers and acquisitions guide" to boost m&a and restructuring market
2024-09-15
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on september 13, siruipu (688536)'s application for the issuance of targeted convertible bonds and the cash acquisition of chuangxinwei was approved by the china securities regulatory commission. this case is the first case of a science and technology innovation board company acquiring unprofitable assets after the release of the "eight articles on the science and technology innovation board". it is also the first successful registration case in the entire market after the release of the new regulations on targeted convertible bond restructuring. the market valuation, differentiated pricing and other arrangements set up in the transaction are also quite instructive.
recently, the shanghai stock exchange's merger and reorganization market has continued to be active. main board mergers and acquisitions such as china shipbuilding (600150) and china heavy industry (601989), guotai junan (601211) and haitong securities (600837) have been announced one after another, and mergers and acquisitions on the science and technology innovation board such as precision electronics (688337) and siruipu (688536) have been implemented one after another. in order to take multiple measures to activate the merger and reorganization market, the shanghai stock exchange has added a new trick. it recently launched the "a guide to rules, policies and cases on mergers and acquisitions of listed companies" (hereinafter referred to as the "mergers and reorganizations guide") and released it to the market on september 13.
it is understood that the "m&a and restructuring guide" aims to help listed companies accurately understand the rules, grasp the latest regulatory guidance, stimulate the vitality of the m&a and restructuring market, and promote the implementation of more typical demonstration cases.
providing a practical “tool book” for mergers and acquisitions and restructuring
mergers and acquisitions and restructuring are important ways to achieve industrial integration and transformation and upgrading, optimize resource allocation, and help listed companies achieve high-quality development. they are also effective means to cultivate and develop new quality productivity under the current new situation.
the reporter found that since the full implementation of the registration system in february 2023, the china securities regulatory commission and the shanghai stock exchange have issued more than ten favorable policies for mergers and acquisitions and restructuring by modifying and improving rules, optimizing regulatory mechanisms, and strengthening market communication. they have responded to market demands and supported high-quality mergers and acquisitions and restructuring of listed companies from the aspects of innovating institutional arrangements, enriching payment tools, and optimizing review and supervision.
relevant person in charge of the shanghai stock exchange believes that in practice, the mergers and acquisitions of listed companies are diverse in form and complex in process, which may involve major changes in the assets and businesses of listed companies, as well as major changes in the rights and interests of listed companies. the applicable securities regulatory rules are complex and multi-level, and it is difficult for market entities to fully and accurately grasp them. the "mergers and acquisitions and reorganizations handbook" released this time comprehensively sorts out the main institutional rules for the supervision of mergers and acquisitions and reorganizations in the capital market, including both the departmental regulations and normative documents of the china securities regulatory commission and the self-regulatory rules of the exchanges. it is compiled into a collection of rules for companies to refer to and use, and provides a practical "tool book" for sci-tech innovation board listed companies to adapt to their own needs, plan and implement mergers and acquisitions and reorganizations.
according to reports, from the comprehensive revision of the rules such as lowering the floor price for restructuring shares and improving the restructuring recognition standards by absorbing the advanced experience of the science and technology innovation board in the "management measures for major asset restructuring of listed companies" (hereinafter referred to as the "restructuring measures"), to the issuance of rules for restructuring targeted convertible bonds and convenient policies to extend the validity period of financial data for share issuance restructuring; from improving the "small and fast" review mechanism for restructuring on the science and technology innovation board and clarifying the review time limit, to further interpretation of the "eight articles of the science and technology innovation board" on the acquisition of unprofitable hard technology companies and the improvement of valuation inclusiveness, all of which demonstrate strong support for listed companies to improve quality and efficiency through mergers and acquisitions and restructuring. the aforementioned contents are all included and interpreted in the "mergers and acquisitions and restructuring guide".
analysis of typical casesresolving doubts for market players
the reporter learned that since 2023, the shanghai stock exchange has held nearly 50 m&a-related training and research activities to publicize the latest policy directions to market players and "ask for advice and needs" on how to better activate the m&a and restructuring market.
it is reported that the "mergers and acquisitions and restructuring guide" released this time focuses on hot topics such as valuation pricing that have high market attention and possible misunderstandings of rules, unprofitable restructuring targets, performance commitment supervision, absorption mergers of listed companies, and issuance of targeted convertible bonds for restructuring. it selects cases that have been approved for registration or implemented in recent years, in the hope that all parties in the market will abandon "inertial thinking" and jointly promote the implementation of more representative cases.
taking the absorption and merger of listed companies as an example, the reporter learned that in the previous visits and surveys of the shanghai stock exchange, many market players have said that there are few regulations and cases regarding the absorption and merger of listed companies, and there are doubts about the pricing principles and lock-up periods of issued shares, the protection of the rights of dissenting shareholders, and the disclosure requirements related to transaction plans. to this end, the "mergers and acquisitions and reorganizations handbook" selects absorption and merger cases with different transaction essences, such as absorption and merger between a-share listed companies, absorption and merger of parent companies by a-share listed companies to achieve overall listing of high-quality assets, and absorption and merger of a-share listed companies by h-share companies to achieve "a+h" dual listing, to provide case references for listed companies in need to design restructuring plans.
for example, along with the revision of the "management measures for major asset restructuring of listed companies" under the comprehensive registration system, the restructuring is conducive to improving the "sustained profitability" of listed companies and is changed to "sustainable operating capacity"; on this basis, the "eight articles of the science and technology innovation board" further clarifies that it supports science and technology innovation board listed companies to focus on enhancing sustainable operating capacity and acquire high-quality unprofitable "hard technology" companies. however, market players still have questions about how to design such transaction plans and disclose information.
in this regard, the "mergers and acquisitions and restructuring handbook" selects cases in recent years where listed companies have acquired loss-making or slightly profitable target assets, and interprets the cases based on the reasons disclosed by the listed companies for the target assets' lack of profitability in the reporting period, the necessity of the transactions, their role in enhancing the company's overall strength, and the expected future returns of the target assets.
promote the implementation of more demonstration cases
the reporter found that since the beginning of this year, the science and technology innovation board listed companies have disclosed a total of 6 major asset reorganizations and asset purchases through the issuance of shares (including convertible bonds), with a total disclosed transaction amount of 2.364 billion yuan, and the number and scale of transactions have exceeded the whole year of 2023. in addition to reorganizations, acquisitions of high-quality listed companies based on industrial synergy are also in full swing, with the first cash "a controlling a" - mindray medical (300760) taking over the science and technology innovation board company huitai medical (688617) and other cases.
after the release of the "eight measures for the science and technology innovation board", puyuan jingdian's application for issuing shares to acquire a minority stake in a subsidiary was registered by the china securities regulatory commission. it took only two months from the shanghai stock exchange's acceptance to the china securities regulatory commission's registration and effectiveness; siruipu's application for issuing directional convertible bonds to a third party and acquiring unprofitable assets in the previous reporting period in cash has been registered by the china securities regulatory commission, creating multiple "first orders" records in the a-share m&a market in recent years. in addition, more than 10 sci-tech innovation board listed companies have actively responded to the policy call, carried out foreign investment or asset acquisitions around the same industry or upstream and downstream of the industrial chain, and improved the quality and efficiency of development through mergers and acquisitions. the mergers and acquisitions of the sci-tech innovation board have gradually heated up and begun to show an active trend.
the shanghai stock exchange said that it will continue to understand problems, listen to demands, and answer questions through visits, surveys, training seminars, etc., and continuously strengthen policy dissemination to jointly create a better market environment. with the strong support of the regulatory authorities, it will continue to adhere to the principles of marketization and rule of law, support market-oriented transaction arrangements and program innovations set in accordance with regulations, promote the implementation of more demonstration cases, better play the role of the main channel of mergers and acquisitions in the capital market, promote the improvement of the quality of listed companies, and continuously consolidate the internal foundation for the healthy development of the market.
the paper reporter qi yeyun
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