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Blue Whale News, November 4th (Reporter Xu Xiaochun) XJF has disclosed its tender offer plan for Gapack for six months. In October, XJF's tender offer was approved for overseas investment, and the company also successfully appointed two directors to Gapack's board of directors through a shareholder meeting. XJF is getting closer to the leading position in the aseptic packaging industry.

However, at this time, the shareholders have chosen to withdraw. On the evening of November 3rd, BRF and Suzhou Houqi, the second and fourth largest shareholders of XJF, respectively, announced reduction plans of no more than 2%. Suzhou Houqi, behind BRF, is one of XJF's major clients New Hope. Since the second half of last year, BRF and Suzhou Houqi have already resigned the directors appointed by XJF.

Shareholders reduced their holdings by 4% before the IPO, with a yield of only 85% over five years.

On the evening of November 3rd, XJF announced that shareholders holding more than 5% of the company, BRF and Beijing Housing Investment Management Center (Limited Partnership) - Suzhou Houqi Equity Investment Center (Limited Partnership), planned to reduce their shareholdings by no more than 2% through centralized bidding and block trading within 3 months after 15 trading days from the disclosure date of this announcement, totaling no more than 16.6658 million shares.

As of the third quarter report, BRF and Suzhou Houqi held 12.53% and 8.72% of XJF's shares, respectively, ranking as the second and fourth largest shareholders in the company. As of the closing on November 4th, XJF's stock price was 8.82 yuan per share. Based on this, BRF and Suzhou Houqi could cash out approximately 73.5 million yuan each this time, totaling around 0.147 billion yuan.

XJF mainly provides aseptic packaging products to downstream clients like Yili and New Hope. In September 2022, XJF went public on GEM of the Shenzhen Stock Exchange at an IPO price of 18.19 yuan per share. Looking at XJF's current stock price, it has consistently been below the IPO price. Both BRF and Suzhou Houqi reducing their holdings this time were shareholders before XJF's IPO.

BRF is a fund specializing in investing in the agriculture and food industry, with its main sources of funds coming from retirement funds, pension funds, insurance funds, and donation funds from the USA, United Kingdom, the Netherlands, etc.

In November 2018, BRF acquired 13.2699 million shares of New Hope Liuhe held by Central Carsonna for a consideration of 63.1903 million yuan. In January of the following year, BRF acquired 28.8769 million shares held by Zhuhai Jufengrui for a consideration of about 0.138 billion yuan. In October 2019, BRF acquired 10.5 million shares from Yili for 50 million yuan. At that time, New Hope Liuhe was valued at approximately 1.7 billion yuan.

Behind Suzhou Houqi is one of the major clients of New Hope Liuhe, New Hope. When investing, Vice Chairman Wang Hang of New Hope Group controlled Suzhou Houqi through controlling the general partner of Suzhou Houqi by Peking Housheng. In addition, Liu Yonghao, the actual controller of New Hope, also reserves stakes in Suzhou Houqi and Peking Housheng through Southern New Hope, Xindi Industries, and other companies he controls.

Suzhou Houqi almost invested in New Hope Liuhe at the same time as BRF. In October 2019, Suzhou Houqi acquired 36.624 million shares of New Hope Liuhe held by Yili for a consideration of about 0.174 billion yuan.

According to a rough calculation by Lanjing News reporters, based on the valuations at the time of BRF's and Suzhou Houqi's investments, the return on investment for both BRF and Suzhou Houqi is approximately 85% when they first reduce their holdings after five years of investment.

After investing in New Hope Liuhe, BRF and Suzhou Houqi respectively appointed Wang Ziting and Chen Min as directors of New Hope Liuhe. Before they reduced their holdings, Wang Ziting resigned from the board of directors in August 2023 due to work arrangements, and Chen Min also left in January of this year.

Successful appointment of two directors to Gapack, the tender offer continues to progress.

The biggest move of New Hope Liuhe this year was the acquisition of Gapack, putting the control battle for the leading sterilized packaging company on the table.

In 2023, Yili's supplier Xin Jufeng successively acquired 28.22% of the equity of Gapack, and the founders of Gapack showed great resistance, attempting to block the acquisition by initiating an antitrust investigation. However, Xin Jufeng eventually became the largest shareholder as planned. Subsequently, Gapack brought in major customer Mengniu as an investor, and through appointment, occupied seats on the board of directors. Later, Xin Jufeng's two proposals to appoint directors were both rejected. The founding team of Gapack firmly obstructed Xin Jufeng from touching the company's controlling rights, citing competition between their respective major customers.

In May of this year, Xin Jufeng put forward a tender offer plan for Gapack. According to the transaction proposal disclosed by the company on May 9th, Xin Jufeng plans to issue a tender offer to Gapack shareholders through its wholly-owned subsidiary Jingfeng Holdings, involving 1.029 billion shares already issued by Gapack, with a maximum price of 2.65 Hong Kong dollars per share, making the total price of the tender offer 2.729 billion Hong Kong dollars. However, the day after Xin Jufeng put forward the tender offer plan, Gapack's board of directors once again rejected Xin Jufeng's proposal to appoint directors.

The ongoing struggle for control rights remains tense, and the process of taking over Gapack seems difficult and has not been successful for a long time. Xin Jufeng's semi-annual report mentioned that in the first half of the year, the company's management expenses increased from 53 million yuan in the same period last year to 0.103 billion yuan. Among them, the intermediary service fee amounted to 43.7155 million yuan, mainly due to the increased expenses for acquiring Gapack this period. In addition, the net outflow of cash from Xin Jufeng's investment activities sharply increased to 0.695 billion yuan in the first half of the year in order to prepay the tender offer deposit for the Gapack acquisition.

In October, Xin Jufeng made new progress in the acquisition of Gapack. On one hand, Xin Jufeng announced that the offer to acquire all shareholders of Gapack had obtained overseas investment filing approval. The tender offer plan of Xin Jufeng for Gapack is further advancing. Currently, the relevant work related to the overseas investment filing of the National Development and Reform Commission and the declaration of the operator's concentration involved in the tender offer transaction is still in progress.

On the other hand, Xin Jufeng once again nominated Cai Chencheng as a non-executive director of Gapack, and appointed Gao Songyan as an independent non-executive director. In the advance notice, Gapack clearly stated that all members of the board of directors (including independent non-executive directors) believe that the appointment of the above personnel is not in the best interests of the company and shareholders as a whole, and recommend shareholders to vote against all resolutions at the general meeting proposed by Jingfeng Holdings. However, the appointment resolutions for Cai Chencheng and Gao Songyan were passed at the shareholders' meeting, receiving 56.69% and 59.72% of the voting rights support respectively. Currently, Gapack's board of directors consists of 9 members, with Xin Jufeng holding two seats. Xin Jufeng's acquisition of Gapack continues, but the company's pre-IPO shareholders are already eager to reduce their holdings in advance.

However, in the end, the appointment resolutions for Cai Chencheng and Gao Songyan were passed at the shareholders' meeting, receiving 56.69% and 59.72% of the voting rights support respectively. Currently, Gapack's board of directors consists of 9 members, with Xin Jufeng holding two seats. Xin Jufeng's acquisition of Gapack continues, but the company's pre-IPO shareholders are already eager to reduce their holdings in advance.