Fuchun Communications will acquire game company Moqi Kaka in cash and its major shareholders fully support it

on December 6th, Fuchun Communications released the "draft of Major Asset reorganization" (hereinafter referred to as the "draft"), and the company plans to spend 880 million yuan to acquire 100% stake in Mochi Kaka.

original title: Fuchun Communications Cash acquisition Game Company's major shareholders fully support mergers and acquisitions of listed companies

on December 6th, Fuchun Communications issued a "draft of major asset restructuring" (hereinafter referred to as the "draft"). The company plans to spend 880 million yuan to acquire 100% equity in Mochi Kaka.

compared with the previous plan, there are many adjustments in this draft. in terms of valuation, the price-to-earnings ratio of Mochka's profit commitment is 13.97 times, 11.14 times and 8.24 times respectively, which will be more beneficial to investors compared with 15 times, 11.53 times and 8.75 times of the "plan".

"this is not the most important thing. The plan has been changed from the previous cash plus additional share acquisition to all cash acquisition, and in addition, major shareholders will provide listed companies with free loans of up to hundreds of millions of yuan, all of which show strong optimism for this acquisition." One investment banker said.

the draft shows that Fuchun Communications has signed a "cash purchase agreement" with the other party to the Mochi card transaction. According to the agreement, Fuchun Communications pays cash to the other side of the Mochi Kaka transaction to buy 100% equity in Mochi Kaka. According to the evaluation results of the "Mochi Kaka assets Evaluation report" issued by Zoomlion Evaluation, and after friendly negotiation between all parties, the 100% equity transaction price of Mochi Kaka is 880 million yuan.

Fan Ping, Qiu Xiaoxia and Fu Peng, the counterpart of Mochi Kaka transaction, promised that after deducting non-recurring profits and losses realized by Mochi Kaka in 2016,2017, 2018 and 2019, the net profit attributable to the shareholders of the parent company was not less than 63 million yuan, 79 million yuan, 99 million yuan and 114.5 million yuan, respectively.

in addition, compared with the previous plan, the way of cash + additional shares has been changed to all be paid in cash, no new shares will be issued, and matching funds raised will be cancelled.

people in the industry say that the all-cash acquisition is of great significance. On the one hand, it shows that the company continues to be optimistic about the future of Mochka. Not issuing additional shares, coupled with interest-free loans from major shareholders, can maximize the company's EPS per share, increase the profitability of listed companies and benefit investors. On the other hand, pure cash acquisitions do not need the approval of the China Securities Regulatory Commission, only the approval of exchanges and shareholders' meetings, which will greatly speed up the process of buying Mochi Kaka and improve the efficiency of mergers and acquisitions, which may make time for follow-up capital operations.

however, pure cash acquisitions will also bring greater financial pressure to listed companies, in this regard, Fuchun Communications in the "draft" through transaction consideration installment, the target company to buy back shares, major shareholders free loans to listed companies and other means to avoid.

for the cash consideration of 880 million yuan, Fuchun Communication will complete the payment by installments.

in addition, in order to dispel investors' worries about "cashing out", Fuchun Communications designed a buyback clause this time, deeply binding the interests of the target company and listed companies, and creating a community of interests.

"Plan" shows that Fan Ping, Qiu Xiaoxia, and Fu Peng, the three main shareholders of Mochi Kaka, have received 440 million yuan in the first phase of the transaction in five transactions, all the above-mentioned prices should be used to buy the shares of Fuchun Communications directly or indirectly held by Miao Pinzhang, the actual controller of the company. The shares acquired by Fan Ping, Qiu Xiaoxia and Fu Peng in accordance with the agreement shall not be transferred within 12 months from the date of transfer of ownership.

at the same time, Miao Pinzhang promised to provide interest-free loans to Fuchun Telecom after deducting the relevant fees from the sale of Fuchun Telecom shares, fully supporting listed companies in completing mergers and acquisitions efficiently.

in fact, this is also the common practice of many listed companies, including Lishichen, Wechuang shares, and the subject party of Liad have all added "repurchase agreements" after the acquisition.

people in the industry said that after the acquisition of the target party, on the one hand, the listed company hopes that the management or shareholders of the target party to be acquired will not simply cash out, but will continue to run the company well and successfully fulfill their performance commitments. therefore, they hope to achieve "interest bundling" by rewarding management stocks through partial stock payment or performance realization.

Edit: nancy