The man who let Wang Jianlin go
Author: Guo Ruyi
Source: Business People (ID: biz-leaders)
On December 12, the listing script of Zhuhai Wanda Commercial Management finally had a new plot, and the thunder on Wang Jianlin's head was removed.
According to Dalian Wanda's official website, PAG Investment Group and Dalian Wanda Commercial Management signed a new investment agreement, under which PAG will work with other investors to reinvest in Zhuhai Wanda Commercial Management after the original investment expires and is redeemed by Wanda. According to the new agreement, Dalian Wanda Commercial Management holds 40% of the shares, making it the single largest shareholder, and PAG and other institutions hold a total of 60% of the shares.
More importantly, the new investment agreement no longer sets a VAM clause for listing.
Prior to this, Zhuhai Wanda Commercial Management failed to go public many times, which became Wang Jianlin's number one problem. Originally, if it could not be listed at the end of this year, Wanda needed to pay about 40 billion repurchase money, with the successful negotiation with investors, Wanda is likely not to actually pay this money, there is still more than half a month before the end of the year, Wang Jianlin passed the test.
The PAG, which took the lead in signing a new "treaty" with Wanda, seems to be inconspicuous in the investor camp of Zhuhai Wanda Commercial Management. Compared with it, among the investors introduced by Wanda in 2021, there are many more well-known big-name institutions. However, judging from the amount of investment at that time, PAG invested 18 billion yuan, accounting for nearly half of the total investment. In other words, it should be the one that Wang Jianlin wants to loosen his mouth the most.
Of course, there is a price to be paid for signing the new agreement - Wanda's shareholding in Zhuhai Wanda Commercial Management has been reduced to 40%. In 2021, it accounted for more than 78%. Wang Jianlin lost his absolute controlling stake.
Now, for Shan Weijian, the core figure of PAG's investment, Wang's feelings may be mixed.
Shan Weijian, 69, is a well-known name in the private equity world. The Hong Kong-based PAG Group, where he is a partner, claims to have over US$50 billion in assets under management and is an Asian private equity giant. In March last year, PAG submitted an IPO application on the Hong Kong Stock Exchange, but it has not yet been listed.
Judging from his professional resume, Shan Weijian is quite legendary in the industry. According to public information, he returned to China from overseas in the early 90s, first worked at JP Morgan Asia, and then joined Newbridge Capital (with a U.S. background) as a partner in 1998.
At the time of the outbreak of the financial crisis in Asia, the First Bank of Korea was in difficulties both internally and externally, and the South Korean government had no choice but to seek investors to take over the restructuring. At that time, it was Shan Weijian who entered the game on behalf of Xinqiao, and in the end, after hard negotiations, Xinqiao Capital defeated HSBC and won a controlling stake in the First Bank of Korea. Five years later, the bank was on the right track, and Shimbashi retired with high returns. Shan Weijian became famous in a fight.
A more representative battle occurred in the merger and acquisition case of Xinqiao's acquisition of Shenzhen Development Bank.
In 2002, China's accession to the WTO forced the reform of the domestic banking industry, and the Shenzhen Development Bank in Shenzhen was riddled with troubles, with non-performing assets as high as 10 billion yuan. Shenzhen's local government also intends to withdraw its stake and allow outside investors to take over the transformation. In 2004, Newbridge Capital took over Shenzhen Development Bank by transferring the shares transferred by state-owned assets. The equity transaction was significant, as Xinqiao became the first foreign institution to take a controlling stake in a mainland commercial bank. In the words of the Wall Street Journal at the time, it was "making history."
Shan remains a key player in the deal.
In these equity transactions, Newbridge Capital is not a pure financial investment, but after becoming the owner, it will extricate the target company from difficulties by leading the operation, and finally exit to benefit. In 2006, Xinqiao merged with TPG, a private equity firm, and Shan Weicheng became a senior partner of TPG. By 2010, TPG had transferred its stake in Shenzhen Development to Ping An, which was interested in expanding in the banking sector, facilitating one of the largest financial acquisitions in China at the time. TPG only received a cash guarantee of 11.4 billion yuan.
It was also in this year that Shan Weijian chose to leave TPG and become a partner of PAG Investments, mainly responsible for private equity investment business to this day.
In the past ten years, PAG Investment has made frequent moves in the mainland, and in 2021, it entered Zhuhai Wanda Commercial Management, and it was Wang Jianlin who mobilized his circle of friends to bring in Shan Weijian to help, and jointly set up the famous IPO gambling game. And his reputation in the industry has also risen, and he once had the title of "King of China's Private Equity". In March last year, Shan Weijian joined Alibaba's board as an independent director, having previously held this position on the boards of Wilmar International, Baosteel and Lenovo.
Shan Weijian once explained his investment style in an interview, which is buy-out. Different from financial investment, this investment style is intended to gain control of the target, increase the value of the company's business through reorganization, and then sell it for a profit. From Xinqiao to TPG to PAG, Shan Weijian has always adopted this investment strategy. From this point of view, the acquisition of 60% of the equity of Zhuhai Wanda Commercial Management by PAG and other investment institutions may also be a projection of this strategy.
Earlier this year, Shan Weijian made a name for himself on the Forbes billionaires list, and there are not many people in Asia who have made their fortunes in the private equity business. But Shan Weijian did it. However, he himself does not seem to be keen on this reputation, and he told Forbes that he had miscalculated and that his wealth was not enough to make him on the list.
In addition to investment, Shan Weijian also has a hobby of writing books. At present, he has published several books and disclosed many of the inside information of the transactions of the year. In addition, he has written a book similar to his autobiography, which tells about some of his earlier experiences, such as the difficult years of being an educated youth in the Gobi Desert in Inner Mongolia and studying in the United States, revealing the complicated life of this private equity tycoon. He said what he learned from his difficult experience was to be prepared for adversity.
These are the bright sides.
In terms of investment business, Shan Weijian seems to have a time to lose his eyes. In 2012, he interviewed the editor of Forbes Chinese.com, in which he mentioned Buffett's investment in BYD, and he criticized Buffett for not doing well in this deal, and he will definitely lose money, because he is investing in an industry and enterprises with overcapacity and no competitive advantage. Facts have proved that Buffett is doing a good business.
What will be the result of the business he made with Wanda?
*The title image was purchased from Visual China