JUMEI privatization of small shareholders into the victim of the institutional defects
JUMEI privatization management announced $7 per share prices, investors bristle, dangdang pomp. JUMEI more than two years ago to the unit price of $22 in nyse IPO, recently a month price down to about $6, was suddenly announced $7 privatization management. Estimates for the most part JUMEI investors are losing money, emotional really hard to accept.
Whatever investors accused management “no”, but had to admit, privatizing the behavior itself, did not violate any rules. The United States securities laws or the SEC, exchange or other never do quantitative limit of privatisation prices, they are not responsible for to judge the discretion of the price. In theory, ms Chen even if make a $1 offer, also can accomplish themselves. Because, on the privatization process, and finally by the general meeting of shareholders vote, although opinions issued by the special committee are needed before, but the effect is limited. And voting rules, ms Chen has super voting rights, the privatization of the initiator has 90% of the vote, they do not need to avoid in the vote! Yes, have no wrong, privatizing the buyer also vote! So, the general meeting of shareholders vote is purely through the motions.
Here involves two problems, one is a super voting rights, also known as AB shares system. Means that a person shareholders (usually management), shares in a majority of cases, in order to continue to control the company, the holders of stock increase the voting power of a multiple. In ms Chen JUMEI holds about 35% stake, but the vote was 75.5%. The alibaba group, give up the hkex, diverted stocks, because the hkex refused to modify with shares with right to rule. The other is a voting rules. Hong Kong company private, in accordance with the provisions, “at least 75% to attend the shareholders meeting and vote no interested shareholders (refers to the stake for the control shareholder and consistent with his action person outside of the holdings of shares, or through their representatives, and shall not be more than in terms of voting rights, 10% of all without concern for shareholders to vote against”. And U.S. stocks privatisation voting rules, depending on the company’s registered, not the securities law of the United States. JUMEI and almost in most of the other company, registered to the cayman islands, you just need to 66% of the votes through, and privatization of the buyer without having to withdraw. Sohu, sina and other company registered in Delaware, privatization is much more difficult.