Wen Leju Finance and Economics Yan Ming Association
After three months, without waiting for a formal sale and purchase agreement, the script of Country Garden Services' acquisition of Hefu Brilliant was rewritten.
On February 7, Country Garden Service (06098.)HK), Hefu Brilliant (00733HK) jointly announced the termination of the strategic cooperation agreement and possible acquisition.
This represents the proposed investment of 1HK$153.4 billion acquisition of Hefu Brilliant 1063%, and 385% of the new shares and a possible general takeover offer were officially halted.
I still remember that three months ago, Country Garden Services imagined this strategic cooperation, "Through this strategic cooperation, Country Garden Service Group and Hefu Brilliant Group will integrate their respective competitive advantages and share online channels and offline resources in the field of real estate services to build business synergies." ”
The reason given by Country Garden Services for terminating this strategic cooperation agreement is that "the parties to the strategic cooperation agreement are considering current market conditions, recent capital market fluctuations, changes in the parties' expectations for the implementation schedule of the underlying transaction, potential strategic and cooperation objectives, and other factors."
Previously, if completed 10With the acquisition of 63% of the shares, Country Garden Services' shareholding in Hefu Brilliant will be further increased to approximately 3563%, surpassing the founder Fu Weicong to become the major shareholder.
The acquisition was terminated, and Country Garden Services' plan to be the major shareholder of Hefu Brilliant was also shelved. However, as the second shareholder of Hefu Brilliant, it still holds 25% of its shares.
The termination of the acquisition is unexpected, and it seems to be reasonable. Three months ago, for Country Garden Services' move to increase its stake in Hefu Brilliant again after a year, some market voices said that "the acquisition is at a super high premium", "the subject matter continues to lose money", and "suspected of benefit transfer." ”
Now, after the release of this termination of the strategic cooperation agreement, some shareholders applauded, "It is better to keep the money to repurchase dividends than anything else." Some stockholders think that "the company has no money".
Judging from the book information released by Country Garden Services, it has abundant cash in hand. According to the data, as of June 30, 2023, the cash and cash equivalents on Country Garden's service account were about 1254.5 billion yuan.
In August last year, Country Garden Services launched a buyback plan with a ceiling of about 3 billion yuan. However, after spending nearly 300 million yuan on 6 repurchases in September, there is no news of further repurchases.
2023 has come to an end, the performance of property companies is expected to decline, and Country Garden Services also announced the news of a decrease in net profit early at the end of the year.
Late at night on December 18, Country Garden Services published an inside information on asset impairment, predicting that its net profit in 2023 will decrease by about 3.2 billion yuan to 4.1 billion yuan. Among them, the ** receivables owed by Country Garden have been provided for impairment, accounting for the majority, about 1.8 billion yuan to 2.3 billion yuan.
This is not a small amount. According to the data, Country Garden Services' net profit in 2022 will be 226.1 billion yuan. According to the performance forecast, if its overall performance growth in 2023 is not strong enough, Country Garden Services will have a great risk of stepping on the loss line.
In this context, it is reasonable for Country Garden Services to cut back on food and clothing and withdraw the acquisition of more than 100 million Hong Kong dollars. After the announcement of the termination of the agreement, the share price of Country Garden Services rose nearly 2%, which was in strong contrast to the dilemma of Hefu Brilliant falling by more than 50% in intraday trading.
In fact, the drama of property enterprise refunds has been common. At the end of last year, COPL suspended the acquisition of 900 million yuan and terminated the acquisition of the engineering supervision business of related parties; At the beginning of last year, Xinda was 7The plan of 8.8 billion yuan to acquire 80% of the equity of Cangheng Investment finally "died"; In addition, CR Vientiane Life also announced the termination of the acquisition of Xiang Biotech.
The M&A market is changing, and you never know what the outcome will be until the last minute.
Related companies: Country Garden Services HK06098, Country Garden HK02007, Hefu Brilliant HK00733