This practice of CA is very hostile. First, CA originally intended that if CSC agreed to merge with CA in a "friendly" way, CA would be willing to buy CSC shares from CSC shareholders at a price of $65,438+065,438+04 per share. But lowering the purchase price now is obviously a punishment for CSC's non-cooperation. Second, the change from a "friendly" agreement to a formal tender offer forced CITIC Jiantou to respond within ten days. In addition, CA also made a request to the Nevada District Court: I hope that the court will decide CSC to give CA's takeover offer to shareholders for discussion in advance before the August general meeting of 1998. The M&A negotiation changed from "friendly" to "hostile", which changed the position of CITIC Jiantou, which was originally interested in finding a merger partner, in the whole merger activity. The board of directors and senior management of CITIC Construction Investment decided to spare no effort to carry out anti-takeover. CITIC Jiantou's response to CA's hostile takeover is as follows: ① Amend the company's articles of association, and cancel the right of shareholders holding 20% of shares to propose an early shareholders' meeting; (2) Set generous rewards for the top 17 managers of the company; Increase the resolution passing rate of shareholders' meeting from 50% to 90%; (4) Threatening to distribute dividends of common stock options to preferred shareholders, paving the way for the company's poison pill defense plan, because in the event of merger, preferred shares can be converted into common stock of the acquirer to increase the acquisition cost; ⑤ A lawsuit of $50 million was filed with the Supreme Court of Los Angeles, and the CA acquisition violated California's unfair business competition law; ⑥ Sue CA and its M&A consultant Bell to the U.S. District Court of Los Angeles for controlling the defendant to illegally obtain CSC confidential information through CSC's former business partner, the credit rating agency.
On March 2, CITIC Jiantou formally rejected CA's offer. On March 6th, after many efforts, CA finally announced that it would not consider extending the offer period after the end of the offer period in March 16, which also meant that CA completely abandoned the acquisition of CSC, thus ending the third largest merger case in American high-tech history. CA didn't go deep into the target company before the merger. Based on a comprehensive understanding, CA believes that the purchase price issued to CSC shareholders is 30% higher than its market price, and the purchase price should be reasonable. But this is actually an ignorance of the psychology of shareholders of CITIC Jiantou. CSC is a fast-growing company. More than half of the shareholders of CITIC Jiantou are long-term investors and have held shares of CITIC Jiantou for at least five years. CSC is the most important part of their portfolio, with a share of 65,438+008 yuan, that is, the purchase price 30% higher than the market price may be reasonable for other merged companies, but it is low for CSC shareholders. An analyst in a high-tech industry thinks that 130 yuan per share is a reasonable price to attract shareholders to give up their shares. CA and its M&A consultant Bell, because they didn't fully understand the shareholders of the target company, made mistakes in the most critical issue of acquisition.
CA chose the wrong merger plan without considering the industry characteristics of the merged enterprise.
For high-tech enterprises, the most important asset is talent. If the talents of the merged enterprise are dissatisfied with the merged company and leave after the merger, it will lose the meaning of the merger. Therefore, hostile takeover of high-tech enterprises is very discouraged, because it often leads to hostile feelings among the management and employees of the acquired party, thus making the merger result unable to achieve the expected results. In this merger war, CA ignored CSC's opposition and went its own way. Merrill Lynch analysts believe that the hostile takeover of CITIC Jiantou was a mistake from the beginning, because even if the hostile takeover is successful, it will inevitably lead to the loss of employees and loyal customers of CITIC Jiantou, and it is impossible to have good business.