Zhao Yiming hit the muzzle of the snack war

Spend 45 million real money to invest, but in the end it is deception?

On November 27, BESTORE angrily sued Zhao Yiming, a mass-selling snack company, to court, demanding the company's right to know the shareholders during his investment. At present, it has been accepted by the court.

This matter should not end easily, and in the next step, BESTORE may also claim compensation for the losses caused by Zhao Yiming's deception of major matters and the company depending on the situation.

If the litigation problem of BESTORE cannot be resolved, after the merger of Zhao Yiming, Snack will face great obstacles if it wants to continue financing and promote the listing.

Good intentions in exchange for deception?

"It's like spending money to raise a son, kindly letting him grow up independently, and as a result, he is behind his back in the arms of competitors, where is the integrity of business?"

Talking about the battle of this lawsuit, netizens have all kinds of brain violence.

On November 27, Guangyuan Juyi, a wholly-owned subsidiary of BESTORE, formally filed a lawsuit against Zhao Yiming in the court because the invested company Yichun Zhao Yiming Food Technology Co., Ltd. (hereinafter referred to as "Zhao Yiming") deliberately concealed the company's major matters and harmed the right to know of minority shareholders during the cooperation period between the two parties.

Previously, BESTORE and Zhao Yiming had a honeymoon period.

In April this year, Zhao Yiming completed a round of financing of 150 million yuan, led by Black Ant Capital, and BESTORE invested 45 million yuan through its subsidiary Guangyuan Juyi, becoming a shareholder holding 3% of Zhao Yiming's equity.

However, on October 16 this year, Guangyuan Juyi transferred all the shares of Zhao Yiming to Black Ant Capital at a consideration of 105 million yuan. In just half a year, BESTORE has received an investment income of 60 million yuan. At the time, it was considered a successful investment.

On November 10, just over 20 days after BESTORE withdrew, Zhao Yiming and Snacks were very busy and suddenly announced their merger

, the third and the eldest in the snack industry merged, and completed the industrial and commercial change registration on the same day.

For this sudden change, BESTORE had no idea about it before.

BESTORE said that during the period of holding Zhao Yiming, the company has always emphasized that it plans to go public independently, and hopes that Guangyuan Juyi can take the initiative to sell its equity. "Since Zhao Yiming wants to go public independently, maybe BESTORE felt that the income was good at that time, so why not be an adult. Relevant people familiar with the matter analyzed.

But what BESTORE may not have expected is that its kindness is exchanged for concealment and deception.

Losses are difficult to estimate

Guangyuan Juyi believes that the major transaction between Snack is busy and Zhao Yiming, involving nearly 7,000 stores, and the consolidated sales in 2022 will be nearly 7 billion yuan, and it is impossible to complete all the processes required for the merger in just over 20 days, such as due diligence, negotiation, contract drafting, and investor approval.

Wang Kaijie, a senior lawyer at Shanghai Xinghan (Wuhan) Law Firm, is mainly engaged in corporate and commercial/investment, financing, mergers and acquisitions and other legal business areas. Based on the actual experience and practice of investment, financing and M&A, he analyzed that the merger of two leading enterprises needs to follow a more complex process, which generally takes at least two months and can be as long as one or two years. If inferred from this rhythm, then, before Guangyuan Juyi sold its equity, Zhao Yiming was likely to be busy with snacks to negotiate the merger, and intentionally or unintentionally chose to hide the news from BESTORE.

Moreover, Zhao Ding, Wang Ping'an and other Zhao Yiming executives used to hold one of the shareholding platforms of "snacks are busy", Yichun Kouniao Management Partnership (Limited Partnership), was registered on September 28 this year. If analyzed from this timeline, the initiation and decision-making of the merger of the two companies is very likely to be earlier than Guangyuan Juyi's withdrawal from Zhao Yiming.

According to the provisions of the Company Law, the Articles of Association and the Shareholders' Agreement, Guangyuan Juyi, as one of the shareholders, enjoys the legal rights of knowing, decision-making, inspection, and preemptive purchase.

Zhao Yiming has never consulted Guangyuan Juyi on this.

Guangyuan Juyi said that it was Zhao Yiming's deliberate concealment and misguidance that directly led to the company's transfer of its equity based on the wrong or false transaction background and pricing basis, which seriously damaged its legitimate rights and interests.

On November 21, Guangyuan Juyi sent a letter to Zhao Yiming, asking the other party to provide relevant documents related to the company's financial and major decision-making during his tenure as a shareholder, but Zhao Yiming never replied.

For BESTORE, because of Zhao Yiming's concealment and deception, the losses caused by it are difficult to estimate for a while.

At the beginning, BESTORE decided to invest in Zhao Yiming because it saw the development potential of the mass snack track. The company has been deeply involved in the leisure snack industry for more than ten years, and has a strong supply chain advantage, which can form a synergy with Zhao Yiming.

Although the transaction between Zhao Yiming and Snack is very busy is called a merger, it can actually be seen as a "sellout". Since it is to be sold, BESTORE, as one of Zhao Yiming's shareholders, can exercise the right of first refusal, and the company, as a listed company on the main board, also has the strength to acquire.

It can be expected that once Zhao Yiming is acquired, BESTORE will be able to form its own brand snacks and mass-selling snacks, rewriting the current competitive pattern of the leisure snack industry in one fell swoop and gaining endless imagination space.

Silence will not solve the problem

In the past two days, the media has intensively reported on BESTORE's lawsuit against Zhao Yiming, but Zhao Yiming and Snacks are very busy and chose to remain silent and do not make any response.

According to the analysis of legal professionals, the current lawsuit against Zhao Yiming by BESTORE to ask for shareholders' right to know should only be the first step, and the follow-up litigation between the two parties should be stalemate for a long time.

If the lawsuit of BESTORE cannot be properly resolved, it will be extremely detrimental to the development of Zhao Yiming and Snacks.

These two mass-selling snack brands have been frantically "enclosing land" in China to expand their sphere of influence in the past two years, and they have capital behind them to deliver bullets. Capital is not a philanthropist, and it will eventually be withdrawn at a profit. The merger of the two companies is to quickly do large-scale and pave the way for listing.

BESTORE's lawsuit against Zhao Yiming involves equity disputes, which is one of the biggest "roadblocks" on the road to the company's IPO. This big hidden danger will also affect their further financing in the primary market to a certain extent.

What's more, Zhao Yiming and Snacks are very busy, and the legitimacy of the merger itself is also questionable. Lawyer Wang Kaijie analyzed that Snack is busy and Zhao Yiming are both leading enterprises in the mass snack industry, and for the merger itself, it is necessary to further consider whether there is a violation of the concentration declaration system stipulated in Article 26 of the Anti-Monopoly Law in terms of the respective market shares of the two brands. To a large extent, this point determines whether the merger can be carried out smoothly, and may also affect the next move of BESTORE and Zhao Yiming.

In the past ten days, BESTORE has successively completed many major events such as "changing the commander" and "reducing the price", reflecting the unprecedented wolf nature.

Yang Yinfen, the company's new chairman and general manager, is known as "Yang Yidao", who is pragmatic and resolute. In the past, he served as the general manager of the company for a long time and led BESTORE through a rain of bullets.

At the beginning of her tenure, Yang Yinfen quickly put on a posture of fighting a big battle, a hard battle, and fighting for life.

At present, in the stock market, the competition in the snack track is simply fierce. Mass selling snacks uses low prices, and casual snacks are about to have no way out. Under the situation that the industry boss BESTORE took the lead in fighting back with "price reduction", Zhao Yiming's "betrayal" gave BESTORE a chance to expand the business war from another angle.

Since there is a war, BESTORE is obviously not afraid to stretch the battlefield a little bigger.

Since it is going to fight, BESTORE, as a public enterprise, must also fight more openly and with more attitude.

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