They all guessed the beginning, but did not guess the end.
In the middle of the night of April 3, 2018, the Moabhai shareholders met through the US group's acquisition plan. The US group purchased Mobai with a consideration of US$2.7 billion, including 65% cash and 35% US corporation stock. In addition, the US delegation assumed Mobai debt (500 million - Between 1 billion U.S. dollars, the management team stayed. From the time when the U.S. delegation issued a tender offer to the completion of the settlement, the entire process will be completed within two weeks.
"Before November 2017, we all agreed that Mobike and ofo would merge with each other. But no one thought that the final meeting would be with Mob." A Mobike board member told the "Finance" reporter.
Mobike was founded in early 2015. In April 2016, the first car to go online in Shanghai, completed a total of six rounds of financing, financing almost $1.1 billion from more than 30 investors. Its largest competitor ofo has even higher total financing. The growth story of Mobike and ofo is a typical story of entrepreneurship that may only occur in contemporary China—its financing speed, capital participation density, and business expansion rate are all rare in the past few years.
The background of this merger and acquisition is the scene expansion of the US Mission in the field of life services; it is the positive collision between the US group and the two small giants on trips and take-outs;TencentThe full confrontation with Ali two super giants. Shared bicycles are at the intersection of life services and travel. As a product of high-frequency and multi-field integration, natural bicycles have become the target of big and small giants.
A number of Mobish shareholders told Caijing reporters that they had hoped that Mobba’s path would be to find its own survival space in the giant game. However, the final destination of Mobike proves that the possibility of cycling as an independent ecology has not been verified. It can only be attached to the big ecology and become an important scene in the big platform.
The outside world saw this acquisition come suddenly, but the negotiations started from last September. The acquisition involved nine stakeholders: Tencent, Ali, Meituan, Didi, Li Bin, Mobai management, ofo management, Mobai investors, and ofo investors. Here are the most active stars in China. Entrepreneurs and investors. The more than 30 Moabhai shareholders were divided into two camps—early investors represented by Yueyue Capital, Xiangfeng Investment, Panda Capital, and Innovation Workshop, and Tencent, Sequoia Capital, Gaochun Capital, Huaping Investment, etc. As the representative of the late investors. Because of the large number of participants, all parties have different interests and complexity.
“The decision to take Mobhai is a big one. Bicycles are more tired and heavier businesses than takeaways and online vehicles, and they don’t see a clear profit model.” US-based CEO Wang Xing told Caijing reporters that Mobiya) Selling is very irresponsible.
US Mission: From Investment to Acquisition
Before November 2017, most people believed that Mobike and ofo would merge with a high probability. With the support of Didi and Tencent, from the end of September 2017, the management of both parties plus major investors started negotiations on the merger.
When the negotiations came to an end, "because DDT demanded absolute control over the merged company, this caused Dawei (ofo's founder) to rebound." A Mobi’s board member stated that on November 23, 2017, a number of senior executives who had previously been stationed at OFO were marked by “collective vacations”, and the relationship between Didi and ofo was deadlocked.
The merger and negotiation between Mobike and ofo also stopped at the same time. In order to have more bargaining chips and confidence in the game with Didi, the founding team ofo strongly draws on Ali, which breaks the balance of interests of the shared bicycle industry. In February 2018, ofo obtained 8.6 billion U.S. dollars in the lead of Ali by way of equity and debt, and Ali was able to enter the OFO board. Ali's strong involvement has made the merger even more rampant. Because either Ali or Tencent may not accept coexistence in the same board.
The merger of Mobike and ofo ended.
The U.S. delegation’s acquisition of Mobai also started in September 2017. Wang Xing personally participated in Mob’s C-round financing in October 2016. At that time, the US delegation had already discussed the possibility of synergy between the two businesses. At that time, the outside world did not realize that the U.S. delegation had some ideas in the field of travel until the U.S. delegation took a taxi in Nanjing in February 2017.
“The US group swayed for a long time between the acquisition and the investment in the Moab.” The above-mentioned sources said that the U.S. delegation made an early offer for M&A, but all the people (including Tencent) were betting at the time. Thanks to the merger, the acquisition was rejected.
In December 2017, at the suggestion of Chairman Milibao Li Bin, the U.S. delegation proposed a new plan to invest in Mobiya’s small-capital investment program, which will invest 600 million U.S. dollars in a valuation of 3.5 billion U.S. dollars. 400 million U.S. dollars.
The signal received by the U.S. delegation was that Li Bin would strongly support the U.S. delegation’s additional cooperation provisions outside the investment plan to ensure that the two sides could also have strategic cooperation on the basis of small-cap investment. Li Bin is the founder of the e-car network and Weilai Auto, and is also an investor in dozens of car service related companies. His early strategic thinking and development path were deeply influenced by Li Bin.
But later it was revealed that Li Bin and Mobé CEO Wang Xiaofeng are not completely in agreement. Wang Xiaofeng is willing to accept this 600 million U.S. dollars. But for the additional cooperation clause proposed by the U.S. delegation, whether the management of Mobai accepts and to what extent it has been accepted, both sides saw it for a long time. The negotiation has been difficult for more than a month. By the end of January 2018, the management of Mobai had basically accepted a version proposed by the US delegation. However, Wang Xing's attitude changed. After hesitated for a week, he decided to stop investing, but instead wholly acquired Mobai.
"I don't want to repeat the story of Didi and ofo in the U.S. and Moby." Wang Xing said.
"I don't know if I had changed Wang Xing's thinking after playing with the drops. In short, he later became extremely determined and must make a comprehensive purchase," said Bao Fan, founder of Huaxing Capital. Huaxing Capital acted as a financial advisor to Mobi in this acquisition.
The winter of 2017 created a very favorable time for the acquirer. The number of single-vehicle bikes in the winter fell sharply (Mobai's single-digit reduction from the peak of 30 million single to 15 million single or even lower), and previously Mobike and Ofo unrestrainedly put on bicycles, not planning to lead the two All face the crisis of the capital chain break. At the end of 2017, media broke out that Mobba and Ofo had misappropriated more than 6 billion yuan in user deposits to fill the gap, which released a very dangerous signal.
Against this background, both Mobhai and ofo, financing has become very difficult, and investor confidence has begun to shake.
After the Spring Festival in 2018, the U.S. delegation once again commenced M&A negotiations with Mobike. In the same period, the U.S. delegation took a taxi to land in Shanghai. According to the U.S. delegation, it claimed that it had occupied more than 30% of the Shanghai car market for about three days. This record greatly boosted the confidence of investors including Tencent to the U.S. Mission, and the balance began to tilt toward the U.S. delegation.
"We began to understand and recognize this logic - the 'two rounds' of more life-oriented services rather than travel. Combining living services with short-distance travel, and opening up user accounts, this combination is commercially reasonable." said a Moi Bai board member. .
The two important capital operations in the history of the U.S. delegation were once in October 2015 when the U.S. delegation was merged, and once it was the acquisition of Mobike today. Chen Shaohui, senior vice president of the US Mission, responsible for strategic investment, told the "Finance" reporter that the difference is that one is a merger of the same type, one is a complementary merger, the transaction is done from the perspective of homogenization to eliminate competition, and the acquisition is willing to take such a high price. It is a big leap for the company to turn bicycles into part of the organic capabilities of the US group.
Bao Fan told the "Financial" reporter that the US group had no chance at first, but Wang Xing persisted in all manner of perseverance to the end and did not expect it to be true. "The negotiation has been ups and downs. The US group has seized a good time. ".
The above-mentioned Moi Bai board member stated that if Wang Xing did not change his mind and invested Mobiya before the Spring Festival, he may be able to take advantage of the winter, swearing ofo still in the relationship with Alibaba, stapling the supply chain and preparing a new car. It will be the most powerful attack on the bicycle battlefield to shop new cars this spring and increase the number of rides and experience.
"I would think that he shouldn't take so long, but the U.S. team would think that only acquisitions can really achieve strategic coordination. Everyone will choose what they believe in," he said.
Hesitating, Tencent's Will
In March 2018, after learning that the US group was about to acquire Mobai, Didi quickly gave an offer - a value of US$3.67 billion to invest in Mobi’s 600 million U.S. dollars - this program was the first to invest in the small group of US companies. Thanks give very similar programs. At the time, Didi was busy facing a fight with the U.S. team in Shanghai, and was preparing to take a war on the takeout market with the U.S. delegation. Its relationship with ofo is still in a stalemate.
The above-mentioned members of the Moi Bai board of directors stated that Didi's plan and the US group's plan are all official transaction documents and "a status that can be signed at any time." He said that after Cheng Wei also verbally promised to inject 600 million U.S. dollars, Didi will join Softbank again, invest another 400 million U.S. dollars, and reach a valuation of 4.5 billion U.S. dollars. But then things went so fast that the additional $400 million offer didn't end up on paper.
For most investors, the value of Pre 3,700 million U.S. dollars given by Didi is undoubtedly more attractive. According to the “Finance” reporter, the valuation of Mobike's final round of financing was 3.67 billion U.S. dollars, but the amount of financing was very small. "There was no point in that round. Only $100 million came in." Bao Fan said. Prior to this round of E-round financing, the valuation of Mobike’s investment was 2.6 billion U.S. dollars, and the U.S. buyout price was only 100 million U.S. dollars, or 2.7 billion U.S. dollars.
As a financial advisor to Mobi, Huaxing Capital sent two teams and the US Mission at the same time to start negotiations. They hope to win more possibilities for Mobiya in the complex situation. During the negotiations, Huaxing had suggested that Didi - if you can make a purchase offer at a better price, Mobike will certainly consider.
Bao Fan told the "Financial" reporter, in addition to the acquisition, Huaxing also proposed another proposal - drop an investment offer, but at the same time give the remaining shareholders a Put Option (put options), such as a year after the situation is not in Moscow Well, shareholders can sell the company to Didi, as long as the Put Option is a little higher than the offer of the US Mission, it is very competitive.
“The team tends to want to develop independently, and at the same time, the shareholders' risk is controlled. This offer is more attractive to investors than the US team,” he said. But no one is determined.
The above-mentioned Moi Bai board member stated that the definition of battlefield is different between Didi and the United States Mission. The perspective of sharing bicycles is also different. Didi drops from the trip, while the US Mission departs from the life scene, which leads the former to hope to invest more. The united front, while the latter hopes to establish different capabilities through acquisitions to achieve online and offline scene linkage.
Soon after reaching the end of March, Mobai had successively opened at least two or three board meetings, often in the early hours of the morning. There are 11 seats in the Moab Board of Directors, among which there are 5 seats in the management team, 5 seats in the investor, and 1 seat in Libin, Chairman of Mobai. Among investors, Tencent is the largest shareholder, holding more than 20% of shares, Pleasant Capital followed, holding about 7%, and the rest are Warburg Capital, Sequoia China, and Gaochun Capital, and the latter two are also US Missions. Important shareholders.
“The two programs were discussed in serious terms on the board of directors.” The aforementioned directors stated that the directors were not discussing whether to accept the US group or the “Droplet” plan, but rather, which plan to eventually take to the shareholders’ meeting to vote. On the evening of April 1, Mobye held its last board meeting before the acquisition. In the end, the board of directors passed the unanimous vote and reached an unanimous opinion that the US group plan should be submitted to the shareholders meeting for voting. Then the U.S. delegation also convened the board of directors and passed all the votes.
"Why not discuss it? Because there is no one solution at all. Even if the solution is approved by the board of directors with multiple votes, it cannot be passed at the shareholders' meeting and it will be rejected." The above-mentioned directors said that the core lies in The referee is Tencent, and Tencent made it clear that they will veto the deal to invest in small and medium-sized stocks.
According to the Mobike Statutes, no matter what kind of plan, more than two-thirds of the shareholders' equity at the shareholders’ meeting must be passed, and 67% of the votes must be passed. More than half of the preferred stockholders can agree—this means that any proposal can only receive the largest shareholder. Tencent's support is likely to succeed.
"Comrades, if you have to ask for a hole in the cards, this is called Tencent's will." A member of the Mobye Board of Directors and an investor picked up a glass of water and patted it on the table. The outside world thinks that the board of directors has negotiated with the sword, but in fact it does not need to let the other side pick the words. In the game and interaction process, when they feel the attitude of the other party, they will naturally have a reaction. The end result is to put everyone’s demands. On the desktop, the results of compromise and sawing each other. "You knew it was a wall. Do you still have to hit it?"
Wang Hsing told the "Financial" reporter that prior to the collapse of Mobai and ofo, Tencent did not explicitly support the US group's investment in Mobai. He said that if Dickey offers an investment offer plus Put Option, Tencent has no reason to disagree.
Shared bikes are innovative and valuable, but they do not have a clear profit model. The possibility of their existence as an independent ecology is questionable. Didi could take a more independent path, in part because of the Uber, who has emerged from a business model that is recognized by many people, and Mobai and ofo have not been able to prove themselves. “So for the shareholders, it's just enough to make a billion dollars to make up for the hole, or there is no money to develop. In this case, the US group gives out an acquisition offer and is responsible for pocketing the debt. In a comprehensive view, this is for the benefit of the company. Maximizing choices," said one person who had had deep contact with Mobike and the U.S. delegation.
A person close to the transaction analyzed that if Mobai accepts an investment of 600 million U.S. dollars plus a 400 million U.S. dollar investment in Softbank, although it has obtained a high valuation, it is more like borrowing a debt. When the company finally liquidates, Debt is a priority. Softbank and Didi, as late investors, may have the highest priority for liquidation. The rest of the shareholders may lose everything.
"Even if it starts from its own financial benefits and the interests of all shareholders, Tencent should also make this choice," said one person close to the transaction.
From September last year to this year, there have been too many changes in the entire industry. Ali invests in Hellobike, overweights ofo, and buys small blue bicycles and pushes their own green bicycles. "Ali took two cards. He took a card. He had a card in his hand. Even if he does not agree that the U.S. group would buy Moby, the U.S. League would also share a bicycle, and the shared bicycle would become a competitive fort. The card in our hands is probably a cannon fodder.” A person close to Tencent told the “Finance” reporter that Tencent’s support for the US delegation’s purchase of Mobai is reasonable, and is expected.
On April 3, the Moab shareholders’ meeting was held in Beijing. A Mobi investor told Caijing that “When everyone knows the results, the shareholders’ meeting will become a show time.”
Team's entanglement and shareholder's game
“I hope everyone will not regret when they look back a few years later.” Li Bin said before the final voting on the Moab Board of Directors began on April 1. The voting ended in a few minutes. All votes were passed, including Li Bin, Hu Weiwei, Wang Xiaofeng, and CTO Xia Yiping, all of whom voted in favor.
However, on the April 3rd shareholders’ meeting, Hu Weiwei, Wang Xiaofeng and Xia Yiping voted in favor, opposed and opposed respectively. Li Bin supports the management team and hopes to develop independently, but also balances the opinions of shareholders and finally abstains from the shareholders' meeting. "I think Mobai is still far from the ceiling, but respects the decision of most shareholders and does not want to kidnap investors." Li Bin expressed his position at the shareholders' meeting.
A person close to Tencent told the “Financial” reporter that for this acquisition, the management team had different attitudes and ups and downs. So there will be different voting performance on the board of directors and shareholders.
In the shareholder vote, Panda Capital voted against it, and Xiang Feng and the Innovation Workshop voted in favor. Their argument is that “the overall situation has been set, and it is not meaningful to vote against it”. Finally, more than 75% of shareholders passed the purchase proposal.
Before the board of directors, Li Bin and the management team represented the company to negotiate with the parties. However, when it comes to the interests of investors, the early investors mainly come from pleasure, and the investors in the middle and later stages mainly come from Tencent and Huaping. In this transaction, the early and late investors were identified in the C-round. The C-round was previously considered as the early investor, and the C and C rounds were later considered the investors in the middle and later stages.
According to the "Finance" reporter, because the liquidation priority is more conducive to investors in the middle and later stages, they first take away the principal and part of the returns, and then distribute them in proportion. For example, the Series A preferred stock of Series A investors can receive returns before the common stockholders, and the subsequent issuances of the B, C, D etc. sequences take precedence over the A series and the common stocks, so that the distribution mechanism from the back to the front leads to the creation of Teams and early investors returned less than expected.
Take Pleasant Capital as an example. It holds about 7% of the equity in Mobai, and uses the final round of financing with a valuation of 3.67 billion US dollars. Pleasantly, there are about 250 million US dollars in theory, but if it is calculated according to the liquidation priority, it may only be Divided into tens of millions of dollars.
As a result, early investors expressed hesitation when most of the investors in the mid- to late-stage expressed their support for the US group. The result of the rounds of sawing by all parties is that late investors have made compromises and concessions to early investors, and the final interests have not been prioritized in accordance with the previous round of financing documents. According to the "Finance" reporter, Pleasant Capital has invested more than 10 million U.S. dollars, and the return rate is between 8 times and 10 times. The management team is similar to that of the outside shareholders. Hu Weiwei and Wang Xiaofeng have realized more than 100 million U.S. dollars.
Bao Fan said that no one of Mobow’s shareholders had a loss, and their returns were all above 20%. In addition, all investors except the founding team got a share of US group stocks.
The proposal put forward by the U.S. regiment at first was to purchase Mobhai in cash, but all-cash acquisition shareholders may not be willing to accept it. After several rounds of negotiations, only from the full cash program to 50% cash and 50% stocks, to the final 35% US group stocks and 65% cash.
A Mobba shareholder stated that the investors in the middle and later stages gave a little benefit to the early investors in cash, and that the US team compensated the investors in the late-stage investors. However, because the early investors follow up with the investment, they can also get some US group stocks, not much.
"People bargain and find their own feelings are almost the same." Bao Fan said that in the selection of the US group or drip offer, the investor is standing on the perspective of Mobi’s interests. In the final allocation, they inevitably want to maximize their own interests.
However, the early investors including Panda, Xiangfeng and Innovation Workshop are still not satisfied with the distribution results. They are observers. They have participated in the discussion before the board meeting. When they arrived here, they basically had the overall situation. decided. "Compared with other domestic well-known Internet company mergers and acquisitions, the bargaining process of this transaction is very simple, the overall feeling is that the strategic giant push to go." The above shareholders said.
"Of course we are willing to support the independent development of the company, but if I only think about myself, I have no way to survive." Moab board members, an early investor said.
Bao Fan believes that the greatest revelation of this transaction to entrepreneurs is not to give investors the priority of liquidation in spite of the consequences, but only to ignore the future now. "In many projects, entrepreneurs are asking very high prices. Although VCs accept high valuations, they often have a very embarrassing liquidation preference. Making money out of the profits is essentially 'self-deception.' When mergers and acquisitions occur, early investors do not agree. In the end, they have to sit down and negotiate, and instead complicate things.”
A number of participating traders interviewed by Caijing said that although the interest involved in this transaction was complex, everyone seemed to strictly abide by the rules of the game—all talking on the surface, and there was no secretive calculation contest. The great mergers and acquisitions of China's Internet are extremely valuable. For example, Wang Xiaofeng, although the individual’s clear-cut support for Mobuke’s independence, chose to respect the choices of the majority of shareholders in the end. The recognition rule was the rule, separating the individual’s will from his own role as the CEO. "This man is a man, worthy of admiration." Bao Fan said.
Everything is reasonable. In this sense, this is a merger without a story. The reason why there is no story is not difficult to understand: On the edge of the cliff, no one wants to stay longer.
Reporter Zhang Wei Song Wei / Wen Song Yu / Editor