The Merger Of Laiwu Iron And Steel Group And Ji'Nan Iron And Steel Company Was Blocked, And New Measures Were Proposed For Shan Steel.

"Everything can only be attributed to the fact that the situation is changing too fast," sighs a person close to the Shandong iron and steel group who is facing difficulties in the original merger plan of Ji'nan iron and steel (600022.SH) and Laiwu Steel (600102.SH).

And this time from the announcement of Jigang and Laigang's merger and merger plan has been 3 months.

The reorganization and merger of Laigang in Jinan Iron and Steel Group also blocked the steel integrated version of Shigang group.

A wave is not yet smooth.

"China Business Daily" reporter learned from the Shandong SASAC insider, Shandong SASAC is actively promoting Qilu Securities by Shan Steel Group's shell in A shares listed.

There are two types of shells that Shan steel group can borrow. They are 600784.SH and S*ST 000509.SZ respectively.

But a senior S*ST Hua Hua senior told reporters that for the Qilu Securities Listing, Shan steel group preferred to Qilu securities listed on the A share through IPO, followed by the backdoor.

In the face of Qilu Securities, how will the layout of Lu Yin investment and SST Hua Hua and Shan steel group?

The original plan encountered arbitrage problems.

In February 24th this year, Jigang and Laiwu Steel announced the merger plan, that is, Ji'nan iron and steel through the exchange of shares to absorb the merger of Laiwu Steel shares, the Ji'nan iron and steel exchange price for the first time to consider the issue of the merger and merger of the board of directors resolution announcement 20 days before the A stock trading average price, that is, 5.05 yuan per share, Laiwu steel share price is 12.29 yuan per share, that is, each Laiwu Steel shares for 2.43 shares of Ji'nan iron and Steel shares, this plan will be submitted to the shareholders' meeting.

According to the above plan, shareholders of Laiwu Steel Group will continue to hold shares at the shareholders' meeting which has not yet been held, and the shareholders who vote against it will exercise cash option, that is, Ji'nan iron and Steel Group will purchase the Laiwu Steel shares held by anti voting shareholders at the price of 12.29 yuan per share.

By the end of May 19th, the adjustment of the market led by the real estate regulation, A shares plunged, the price of Laiwu Steel shares has dropped from 12 yuan to 7.74 yuan.

"Nearly half of the stock price arbitrage space, if the original plan is placed at shareholders' meeting, shareholders will choose to vote against it so that Shan steel group can buy shares in its own hands at a price of 12 yuan, while large shareholders must avoid it when voting, so the plan will definitely not be."

This is human nature, said Qiao Peitao, an analyst at the securities and steel industry in the Great Wall.

"Now the Shandong iron and Steel Group is discussing new countermeasures. The original plan has obviously not adapted to the current situation. The group may reformulate a new merger plan, but the question is how to deal with the existing plan. It is a shareholder's veto to be convened through the convening of the shareholders' meeting, and then the introduction of a merger plan, or is it directly handled by the regulators or the group? There is a problem of how to go through the process."

A person familiar with the matter said so.

Ji'nan iron and Steel's dongmi Chi Gong told reporters that the merger plan of Jinan Steel and Laiwu Steel is responsible for the capital Department of Shan Steel Group, and how to deal with the existing plan, only waiting for the new announcement issued by Shan steel group.

"If we fail to make the original plan and reformulate a merger plan on the basis of the existing low stock price, it will be profitable for Shan steel group."

Qiao Peitao said, "the lower the share price of Laiwu Steel Group, the lower the funds for the acquisition of dissenting shareholders by the Shan steel group."

Next step: big financial sector

Opening up the integrated layout of Shan Steel Group, according to the previous report of "China operation newspaper" ("Rizhao Iron and steel Hongkong listing, Shandong iron and steel integration blocked", even though Laiwu Steel and Jigang successfully merged, Shan steel group still has Jinling mining (000655.SZ), Lu Yin investment (600784.SH) and S*ST Hua Hua (000509.SZ) four listed companies.

According to the integration plan of the Shan Steel Group, the first stage of integration is the reorganization and merger of the iron and steel plate, which includes the reorganization of Rizhao Iron and steel and the merger of Jinan Steel and Laigang.

To create a large financial sector, this is another layout plan of Shan steel group.

In this sector, Lu Yin investment and Qilu Securities, as well as the newly established Shan steel group finance company, will play the leading role.

It is understood that Lu Yin investment and Qilu Securities are the holding companies of the Laigang Group of Shan steel group.

In October 2010, the financial building of Shan Steel Group, which was spent heavily in Ji'nan by seven weft two, is about to be completed. The project is located in the core area of Ji'nan financial business center.

"Now in the interior decoration stage, after 10 years of this year, the finance company of Shan Steel Group, Qilu Securities and its Lu Zheng futures and other financial enterprises will be stationed in the financial building office."

A Qilu Securities staff told reporters.

The finance company of Shan steel group was established in April 30th this year, and invested 1 billion 600 million yuan jointly in Shan Steel Group, Jinan Iron and Steel Group, Laigang and Qilu Securities. It is used to speed up the integration of key resources and core businesses, and unify financial management.

For Lu Yin's investment shell, Shandong iron and Steel Group's reorganization is also a matter of time.

In accordance with the provisions of the SFC's listed companies under the same controlling shareholder to avoid competition in the same industry, it is a general trend to integrate the iron and steel resources of Lu Yin's investment, and Ji'nan iron and steel is the integrated platform for the steel plate resources of Shan steel group. Jinling mining is the integrated platform for the iron ore plate resources of Shan steel group.

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The future of Qilu Securities

However, how to integrate Lu Yin's investment has become a difficult problem in front of Shan steel group.

In January 21, 2010, Lu Yin Investment announced that Wei Youshan, the former chairman of the board, resigned. CFO, a member of PL steel and Liu Xiangxue, the Minister of finance of Laiwu Steel Group Ltd, is the chairman of Lu Yin's investment.

Opening up the history of Lu Yin's investment, in 2003, due to the serious losses of Qilu Securities, a wholly owned subsidiary of Lu Yin's investment, in order to save the investment of Lu Yin, which was at the edge of the delisting, Shandong SASAC has injected the investment bank of Lu Steel Group's high-quality assets hot rolled strip production line, replacing Qilu Securities, thus preserving the shell resources of Lu Yin's investment.

This also led to the "dislocation" of Lu Yin investment and Laiwu Steel Group. Lu Yin investment was pformed into an iron and steel enterprise, and Laigang Group became the main group of iron and steel and securities financial business.

By now, the investment in the production line of hot-rolled strip will continue to be inconsistent with the overall situation. The steelmaking production line of Lu Yin's investment will return to Laigang, and the market expects that the entry of Liu Xiang Xue, chairman of Lu Yin's investment, can push this step forward effectively, and if Shandong's SASAC plans to return the Qilu Securities to the investment of Lu Yin, this will be a real "return to the motherland".

Since the establishment of Shandong iron and Steel Group in March 2008, Qilu Securities has been scandalous with Lu Yin investment and S*ST Huashi.

Because these three belong to the same family Shan Steel Group, so the connection between left hand and right hand can always give investors great imagination.

However, Qilu Securities will be listed on the shell of Lu Yin's investment, a person familiar with the matter expressed doubts.

"In the shell resources of Shan Steel Group, it is the investment of Lu Yin and S*ST Hua Hua that still need to be integrated. According to the current situation, it should be first to integrate the investment of Lu Yin, then the S*ST Huashu. As for the backdoor, it is certain that after the integration, only after finishing the shell clearly can we talk about the matter of buying and selling the shell.

The person familiar with the matter said.

Qilu Securities has been unable to wait for the integration of Lu Yin's investment that has not yet been seen.

Since the beginning of 2009, Qilu Securities has been making a lot of money to recruit soldiers and horses, and has made preparations for IPO. Now, the target of the five year listing of Qilu Securities in advance in the 2007 ~2011 development strategy has not been much longer.

"Shandong SASAC has always wanted to put Qilu securities listed on the stock market. In the first two years, it had thought about borrowing the shell. Later, because of the backdoor blockage of GF Securities, the backdoor of the securities company was suspended by the SFC, so the matter of backpacking came to an end.

Now, once again, Qilu Securities is listed on the stock market. According to the current situation, Qilu Securities is more likely to be listed through IPO, "the person close to the senior group of Shan steel group told reporters.