This article is from the official account:rancaijing (ID: rancaijing), author: Zhao Lei, Li Qiuhan, title figure from: vision China
Betta fish and Huya, who have been fighting for many years, are about to put down their fight and tie the knot. The marriage presided over by Tencent is now entering a substantive stage of appointment and marriage, and the day when the two parties are not far from the marriage ceremony.
On August 10, Douyu and Huya each received preliminary merger proposals from Tencent by way of share swaps. That night, the original Huya parent company Huanju Group announced that it would transfer 30 million shares of Huya’s Class B common stock at a total transaction price of US$810 million in cash. This is another increase in Tencent’s shareholding after Tencent’s exercise and holding of Huya in April this year. Huya’s voting rights now exceed 70%.
But in Douyu, although Tencent is also the largest shareholder with a 38% shareholding ratio, it holds Class A common shares, corresponding to 38% of the voting rights. Douyu founder and CEO Chen Shaojie owns 14.7 % Voting rights, Douyu co-founder and contacting CEO Zhang Wenming has 2% voting rights. In contrast, Huya CEO Dong Rongjie has only 2% voting rights in Huya, which means that Douyu management has more voting rights in negotiations Bargaining chips.
At present, the most likely way to merge is, driven by Tencent, which has more voting rights, Huya merges Douyu by issuing new shares. Douyu’s management enters Huya through a share swap and takes charge of the merger. The new group afterwards. But the other parties have some bargaining chips in their hands, and the next negotiation is to resolve the issues of price and control.
For the merger proposal, Douyu was quite positive. On the day Tencent put forward the merger proposal, Douyu released its fiscal 2020 Q2 financial report. In the conference call, Douyu executives believed that “Tencent has adopted live game broadcasting as a A more important strategic position, this is the best for our future development,” and further expressed that it is exploring possible implementation plans with Tencent.
Huya’s management is more cautious. On the 11th, Huya CEO Dong Rongjie issued an internal open letter stating that the company’s board of directors has not yet made any decision on Tencent’s preliminary non-binding proposal, and will carefully review and evaluate this proposal, and make The best choice for the company, shareholders, and employees.
In the eyes of people familiar with the matter, who will ultimately run the new group, “it depends on Tencent’s choice, everything is possible.” For the management of both parties, the performance of this quarter has become a show of strength to Tencent. Opportunity to gain the trust of Tencent. Under the circumstances, the financial reports of the two companies became a window into the inside story of the merger.
The outcome is difficult to distinguish
The financial report numbers on the eve of the merger are like a dowry competition between the two parties. In the similar financial reports, each