The Study On The Motivation And Performance Of Haier Smart Home’s Public-to-private Transaction With Haier Electric

At present,Chinese capital market is continuously deepening reform.The pilot application of the Registration System means that the shell resources of listed companies with a high premium will return to the intrinsic value in the future.The delisting path will become an important topic in the capital market.The PPT,Public to Private Transaction,is a special and important method in the delisting pat.The listed company’s status as a listed entity ends but its business operation does not.The development of PPT in China has a special background.In2004,with the implementation of the Pilot Reform of the Share-trading Business of Listed Companies,there was a trend of PPT among state-owned enterprises.In 2013,there was a trend of PPT among China Concept Stocks due to the valuation differences in the Chinese and American capital markets.In 2020,the Haier Smart Home’s PPT is a case that focuses on capital operation,which means a new direction for domestic PPT research.This case aims to complete the integration of multi-listed p platforms through PPT,and achieve two main goals—one is to“make the cake bigger”,that is to create synergies;the other is to “divide the cake”,that is to build up an effective platform for unified interests.Many large enterprises have experienced rapid and disorderly diversification expansion,and there exists a situation of multi-listed platform.Some are subject to the intricate shareholding structure,so the ICM,Internal Capital Market,has failed.The coordinated development and the unification of stakeholder objectives also have an impact.In this context,the research on the case of Haier Smart Home’s PPT has its significance both in theoretical guiding and practical application.In the section of theory,this paper first summarizes the related literature of PPT and ICM at home and abroad,and explores the concept,the motivation,and the performance impact of PPT and the concept of ICM,the definition and measurement of the ICM efficiency and the basic theory of ICM.On this basis,this paper constructs the theoretical framework according to Contingency Management Theory,Synergy Effect Theory,Pecking Order Theory and Principal-Agent Theory.In the section of industry and case introduction,this article first analyzes the current situation of the white goods industry in which Haier is located,introduces the basic information of Haier Smart Home and Haier Electric and the historical evolution of Haier’s capital operation center migration,and then introduces the transaction plan of this PPT.In the case analysis part,this paper applys the Case Study Method.By measuring Haier’s ICM efficiency,this paper finds that in some years,due to the mismatch between the investment opportunities and capital flows of Haier Smart Home and Haier Electric,the ICM of Haier fails.From the perspective of three major activities of the enterprise: investment activity,fund-raising activity and operating activity,this paper analyzes the motivation of multi-listed platform groups to initiate internal PPT.First,from the perspective of operation activity,the PPT can integrate the operation lines of the subsidiaries that are fragmented disorderly and have a high degree of overlap,save management costs and sales expenses,and facilitate the group to give full play to the synergy effect.Second,from the perspective of financing activity,there are three points.One is that PPT can unify the profit realization platform and reduce the agency cost between the group and multi-listed companies.The other point is to avoid the regulatory requirements and information disclosure requirements of subsidiaries as listed companies,to facilitate the unified allocation of group funds and the efficient use of internal financing;The last point is that the PPT can reduce the rights and interests of minority shareholders,optimize financial indicators,and enhance investment attractiveness to minority shareholders.Third,from the perspective of investment activity,PPT can optimize the allocation of investment opportunities and capital flows among group subsidiaries to avoid the lack of efficiency in ICM,and optimize the ownership structure to facilitate resource aggregation.In terms of short-term performance,this paper uses the Event Study Method to calculate the Cumulative Abnormal Return of this event,and finds that the market is positive about this PPT.In terms of long-term performance,through the analysis of financial information and non-financial information,it is found that this PPT can alleviate the liquidity pressure of Haier Smart Home and exert its synergistic effect in group management and business development,unify the profit realization platform,and build a globalization of capital markets,thereby saving costs and creating premiums.Finally,this paper puts forward general suggestions for multi-listed platform groups,minority investors and regulators.First,it is suggested that groups that have formed multi-listed platforms due to historical development and other reasons should consider completing the integration of operation lines and optimization of the shareholding structure through PPT.PPT can take place when the ICM efficiency is impaired or there are multiple profit realization platforms that cannot unify the interests of different subjects.Then,remind minority investors and regulators of this novel method,and analyze the key points of valuation and core considerations in PPT Finally,regulators should improve the path for companies to withdraw from the market,provide enterprises with various options for delisting,strengthen the followup supervision of PPT and improve the information disclosure system to protect minority shareholders.