Where's Ctrip? A preliminary agreement has been reached to merge the 100%-Share swap

Absrtact: The material is likely to speed up the merger process between Ctrip and where to go. According to the source, the two sides have reached a preliminary agreement, the merger will be 100% to share the way the merger, the share rate of 1:2. Judging by the current clues, two companies

The material is likely to speed up the merger process between Ctrip and where to go. According to the source, the two sides have reached a preliminary agreement, the merger will be 100% to share the way the merger, the share rate of 1:2.

Judging by the current clues, the merger of two companies will be similar to the classic case of the 2012 Youku potato. In the case of the merger of the excellent soil, the potato shareholders completely converted to cool shares, the new company to change the famous cool potatoes, Tudou back to the city. This time, where to go may also be returned to the city, the company merged Ctrip.

To the end of the previous trading day, Ctrip market value of 7.04 billion U.S. dollars, to where the market value of 3.28 billion U.S. dollars, the merger will become a tens of billions of dollars in the size of the company. However, the transaction still has a lot of questions to be solved, such as Baidu's position in the new company, Ctrip decentralized shareholder structure on the merger and the impact of the integration of both business, and on Ctrip CEO Liang Jianzhang and where to go CEO Zhungchengsu who will lead the company has become the focus of attention.

First, look at the fundamentals of the two companies.

The net rate of Ctrip is 5.35, by the end of 2013, the total stock of company management was 7.3%. The first three shareholding shareholders are institutions, 13.72%, 13.13% and 5.41% respectively. Ctrip board set up 7 seats, in addition to Liang Jianzhang, fan, founder Hanting, Shen are independent directors, as well as two directors respectively on behalf of the Audit Committee and remuneration committee. Common stock equals 4 ADSs, and 129.7 million ads for total equity.

Where to go? The net rate of 14.56, after 2013 IPO, Baidu remains the largest shareholder, holding 54.8% of the equity and 58.8% of the voting rights. The management, ZHUNGCHENGSU, has a stake of around 21%, with public ownership and two institutional holders remaining. Where are we going? The company's board of directors set up 7 seats, as well as 4 independent directors, the chairman of whom is Robin Li. Of the share capital to go to, each ads equals 3 B-class common shares, with a total of 114 million ads.

By calculation, you can draw the following predictions:

1, according to the rumors of "1:2 of the proportion of shares" merger, Baidu shares in the new company will be between 15% and 20%, and Ctrip's largest shareholder stake will be around 10%, Baidu will be the new company's largest shareholder, but the new company will present the situation and Ctrip now, shares are more dispersed.

Here 1:2 of the exchange rate comes from inside information, the specific Exchange model and the impact of the distribution of AB shares on voting rights, will still be related to the outcome of this issue.

Before this, Baidu bought Ctrip, integrated Ctrip to where this idea was abandoned. The scheme, which involves multiple options for equity pricing and substitution, will have a significant impact on the transaction, and it makes sense to give up. And now the solution is close to the purchase of Ctrip to where, Baidu because the shareholding to where and holding Ctrip.

But in accordance with this structure of ownership, where Baidu to carry the new company's control will be far less than 91 wireless and other companies, such a merger model is closer to Tencent's stake in the Beijing-east and the public comment on the structure.

2, Ctrip for the new company main body. Two of the company's management team shares a close share.

Ctrip CEO Liang Jianzhang and where to go CEO Zhungchengsu How to form a new company management team, which is the most concerned in the transaction; If the merger in the message is followed, the outcome of the two will not be determined by the equity, or the relative equality status or the core of the problem back to business.

In fact, the battle between Liang and Chuang may be more intense than imagined. The merger was exposed in the negotiations, possibly by the negotiators seeking more favourable terms, or by a third party in order to prevent the transaction. In this rumored two-week period, the biggest change in each version of the message source is whether Liang or Zhuang-dominated the new company.

Liang Jianzhang, the founder of Ctrip, returned to the company in 2013 as CEO and chairman, And take out 260 million of dollars to complete multiple mergers and acquisitions, while leading the company in 2013 to move around the mobile app, I also attended the new release of the app two, 2013 years of profit growth is obvious, most internal news also think that the return of the beam to carry the development of Ctrip. And Zhungchengsu has been to where the founder, after Baidu acquisition still dominate the company's business growth, but in 2013 after the IPO, the 4-quarter increase in investment losses increased, so the first half of the loss narrowed trend is more like a fuss for the IPO.

Another more interesting phenomenon comes from the combination of news reports, most of the news when the two sides will be merged, the main text of the message spent in Liang and Zhuang between the two people, the outsider seems more suspense: The two are no longer the original Wang and Koo role relationship.

3, the current price to go where there is a premium

According to the 1:2 swap, the overall deal is valued higher than today's market value. This is conducive to the completion of the transaction under certain circumstances.

In a previous comment, it was said that the disclosure could make negotiations more difficult, mainly because the price of the merger would not necessarily be recognised by each shareholder. In the case of Youku, the Youku scheme passed the shareholder meeting to complete the merger, and its equity structure and relatively fair price were key to success. Ctrip and where to merge will still face this, Ctrip's share of the current situation may still have some small challenges.

But if the price is set, it means where the holder of the stock will have a certain amount of upward dividend.

4, Baidu will maintain the competitive agreement and inject support for the new company

Along with the news, "Ctrip and where the merger plan has been discussed for years" is inside the story. Only in a few years, Ctrip's market capitalisation has changed little, but it has grown from $ hundreds of millions of trillion to $3 billion trillion. Before that, where to get Baidu investment, and to achieve exclusive cooperation support is where to go the key to further rapid growth of stock prices, this is the business Cooperation Agreement (BCA) and the Intimate Search cooperation Agreement (ZCA). In these two agreements, Baidu promised to go where the competition, and give priority to show where the search results, exclusive flow support, incentive benefits distribution program is where to go in 2013 a successful IPO guarantee.

After the merger, the new company is expected to integrate the full support of Baidu, Ctrip operating costs will be further compressed. It is also seen as the biggest move for Baidu to dominate the online travel industry, and for Ali and Tencent, Baidu's investment in the new company will lead a big step in this area.

5, more than 50% of the market share to shape online tourism giant mac

Can you imagine the CLP and the Cat merger in the field of electronic business? Where to go and the merger of Ctrip is probably the result. In the report data, 2013 Ctrip and where the number of users to the market 33.9% and 22.1%, the remaining competitors share in 10%, the merger will undoubtedly become the online tourism market Big Mac.

The larger difference is in the competitive environment, in the case of the merger of Youku, the merger of the excellent soil is an important strategy to deal with the video website of Baidu Tencent, etc., and the competitive pressure of the independent video website has contributed to the merger of two. But in the line travel industry, where to go and Ctrip does not have such pressure.

Even in the field of electric business, Jingdong and Ali as the highest sales of the two areas, there is still no reason for the inevitable integration. And where Ctrip is merging is definitely not good news for their competitors.