Zhao Yiming, the "upstart" in the snack industry, was sued.
According to a number of ** reports, on December 6,BESTORE (603719SH) said that Zhao Yiming Snacks deliberately concealed the company's major matters and harmed the minority shareholders' right to know, and had formally filed a lawsuit with the people's court on November 27. At present, the court has accepted the case.
Just last month, Zhao Yiming Snacks and the same wholesale snack track "Snacks are busy" announced a strategic merger, the market speculated that the merger, or to prepare for its landing in the capital market, but now, this plan may have to "slow down".
At a deeper level, the two companies after the strategic merger are in a "run-in period". The lawsuit will also bring more uncertainty to the future of this "merger" - at least the franchisees on both sides don't want to see the brand get caught up in endless lawsuits.
The dispute between BESTORE and Zhao Yiming snacks should start with the following announcement.
On the evening of October 16, BESTORE announced that "Guangyuan Juyi" (a wholly-owned subsidiary of BESTORE) transferred 3% of the equity of Zhao Yiming Snack Company to two institutions under the name of Black Ant Capital. "Guangyuan Juyi" (a wholly-owned subsidiary of BESTORE) received all equity transfer payments on October 19, 2023.
At that time, as an early investor in Zhao Yiming's snacks, BESTORE's "out" was quite surprising to the outside world.
The explanation given by BESTORE is, "This transaction is based on the company's own business development needs, and the decision was made through friendly negotiation between the parties to the transaction and related parties." ”
Now, judging from the current lawsuitBESTORE is likely to fall into the "bureau" jointly designed by Zhao Yiming Snacks and Black Ant Capital.
According to BESTORE, only 22 days after the transfer of equity in "Guangyuan Juyi", that is, on November 10, Zhao Yiming Snacks and "Snacks are very busy" issued a "merger" statement.
According to the national enterprise information credit publicity system, the two sides have completed the industrial and commercial change registration on the day of the announcement.
Snacks are very busy" became a shareholder of Zhao Yiming Snacks, with an equity ratio of 8776%。The three affiliated companies of the founder and executive of Zhao Yiming Snacks, as well as "Yihi Partnership" and "Heiyi Partnership", also became shareholders of "Snacks are busy", accounting for more than 35% of the total equity of "Snacks are busy", and Zhao Ding and Wang Ping'an, the founders of Zhao Yiming Snacks Company, also served as directors of "Snacks are busy" on the same day.
It is worth noting that Zhao Ding, Wang Ping'an and other Zhao Yiming snack executives used to hold one of the shareholding platforms of "snacks are busy" - Yichun Kouniao Management Partnership (Limited Partnership), which was registered in Yuanzhou District, Yichun City on September 28 this year, and the executive partner of the enterprise appointed a representative as Zhao Ding.
In other words, judging from clues such as the time of establishment of the shareholding platform, the initiation and decision-making of the merger between the two parties occurred before "Guangyuan Juyi" sold Zhao Yiming's snack shares.
In the lawsuit, BESTORE argued that the completion of the merger between Zhao Yiming Snacks and its largest competitor in the industry was a major change in the company's business policy and investment plan, and that according to the provisions (stippulations) of the Company Law, the articles of association and the Shareholders' Agreement, "Guangyuan Juyi", as one of the shareholders, enjoys the legal rights of knowing, making decisions, inspecting, and preemptively purchasing. The legal rights and interests of "Guangyuan Juyi" as a minority shareholder have not been duly respected.
During the shareholding period of "Guangyuan Juyi", Zhao Yiming Snacks never consulted the shareholder Fang Liangpin Zifang on the merger with "Snacks is very busy", and Zhao Yiming Snacks and related parties emphasized from beginning to end that the company planned to go public independently, hoping that "Guangyuan Juyi" would take the initiative to sell its equity.
In such a short period of time, two companies of this size (involving nearly 7,000 stores and a current valuation of about 9 billion) have completed all the processes required for the merger, such as due diligence, negotiation, contract drafting, and investor approval, which is obviously not in line with the normal investment process.
The only explanation may be that Zhao Yiming deliberately concealed it from BESTORE.
BESTORE believes that Zhao Yiming's deliberate concealment and guidance directly led to the transfer of his equity based on wrong or false transaction background and pricing basis, which seriously damaged his legitimate rights.
In this regard, we contacted both the snack company and Zhao Yiming, and both said that they would not respond to this matter for the time being.
Snacks are very busy" and Zhao Yiming Snacks have completed the strategic merger, and the final result of the lawsuit is still unknown. However, in the eyes of the outside world, initiating a lawsuit is something that BESTORE must "do".
The reason is nothing more than three points:
First of all, in the view of BESTORE, the legal rights and interests he enjoyed as a minority shareholder did not receive the respect that Zhao Yiming deserved.
Tianyancha public information shows that Zhao Ding is very busy with snacks Zhao Yiming's merged entity holds 32% of the shares, which is the second largest shareholder in the company after Yan Zhou, and recognizes both the company's director and Zhao Yiming's CEO.
The complaint of BESTORE undoubtedly openly questioned and denied Zhao Ding's integrity, contract spirit and even legal awareness.
Secondly, the low-price orientation of mass snack snacks is infinitely reducing the profits of first-class merchants, so that the industry threshold that traditional snack retail enterprises have established with great difficulty in the past has returned to before liberation.
In the current leisure snack industry, especially the mass snack industry, due to the "drop and drop" of the world, not only put pressure on franchisees and white-label factories, but also made consumers worry and question "food safety".
In recent years, the leisure snack giants represented by BESTORE have made a lot of efforts in food safety issues, obviously not wanting to see the market that has been getting better and ushering in a fatal crisis of trust again.
Finally, in the process of self-correction and self-revolution, BESTORE has "shined its sword" on the mass sales snack brand.
BESTORE, which has just changed its "handsome", announced that it will carry out "the largest price reduction in the 17 years since its establishment", and it is very determined - its maximum price reduction of 45% is unprecedented.
As a snack brand that is known for its first-class chain and high-quality products, the "first knife" of BESTORE's reform starts from the first, and it is foreseeable that it will form a short-term relationship with the main low-price snack stores.
One is the industry boss, the other is the industry upstart, BESTORE and Zhao Yiming snacks and other wholesale snack brands have begun the war.
Now, BESTORE has made it clear that it is a to"deliberately concealing major matters of the company, harming the right of minority shareholders to know".If BESTORE wins the lawsuit, it may have a huge impact on the entire wholesale snack industry.
On the one hand, for Zhao Yiming Snacks, if BESTORE wins the lawsuit, Zhao Yiming Snacks and even the merged snacks are very busy, and may face an "embarrassing" situation, and even the merger that has been negotiated may be forced to cancel.
Because Zhao Yiming Snacks violated the shareholders' right to know and harmed the interests of shareholders, it is very likely that they will be persuaded to retire and return to the original investors and new financing in the future
At the same time, for snacks that are very busy and this merged snack "Big Mac", the first priority in the future may be to go public.
Then, assuming that BESTORE wins the lawsuit, all the ** will also push these two companies to the forefront, whether it is from the perspective of clear and stable equity, or from the perspective of whether there are disputes and potential risks, the regulatory level definitely does not want it to "go public with illness".
Once the listing is far away, whether it is Snacks is busy or Zhao Yiming's investors in Snacks may ask the company to buy back shares with cash, which will put pressure on the company's cash flow and even lead to a sudden interruption of the cash-burning subsidy.
On the other hand, in the 2023 ranking of mass merchandising snack chain brands, "Snack is Busy" and Zhao Yiming Snacks ranked first and third in mass merchandising snacks, with a total turnover of 76 in China in the last fiscal year600 million yuan.
More worryingly, some worrying signs are already emerging in the new merged companies. Industry analysts said that at present, snacks are very busy and Zhao Yiming's store opening speed has slowed down significantly, most likely because franchisees have insufficient confidence in the new company.
However, if BESTORE loses the lawsuit, in the face of the real wooden boat, BESTORE can only fight back from the perspective of maximizing the interests of the enterprise. At the same time, it is very likely that it will be "counterattacked" by Zhao Yiming and even the newly merged company, and at that time, a bloody storm in the snack track will be inevitable.
From this point of view, Zhao Yiming's snack practice is very likely to have "caught fire", and the snack track will also ignite a new round of war.