Multiple securities industry M&A projects are experiencing "price inversion." Will the transaction plans be adjusted accordingly?

Securities Times reporter Tan Chudan

As March approaches its end, the A-share market has experienced wide fluctuations, causing some of the recent refinancing and M&A restructuring projects to face awkward situations. According to statistics from Securities Times reporters, among listed companies that launched refinancing issuance in March, 33% experienced a “price drop below the issue price.” Notably, sectors such as non-ferrous metals and brokerages, which have seen larger recent declines, are particularly prominent.

It is worth noting that for brokerage M&A projects where the buy-side positions have not yet been executed, the target companies’ stock prices have already fallen below the transaction plan prices. Whether relevant shareholders will raise objections and further adjust transaction details remains to be seen.

Refinancing issuance faces “price drop below the issue price” before a month passes

According to Wind data, in March, 15 listed companies initiated refinancing issuance, but by March 30—less than a month later—shares of five of these companies had already fallen below their issuance prices.

On March 30, the 9.1268 million shares issued through a private placement by subway design were officially listed. The first-day closing price was 13.68 yuan per share, below the 14 yuan per share issue price, meaning that five subscription parties, including Cathay Securities, are already slightly in the red.

In the three days prior, Dongfang Tantalum Industry’s additional issuance of 22.5959 million shares began trading, but the company’s stock price had already experienced a “drop below the issue price” as early as March 3, the day the issuance was launched. On that day, the stock closed at 52.21 yuan per share, below the issuance price of 52.66 yuan. Since then, Dongfang Tantalum Industry’s share price continued to decline; by March 30, it closed at 47.22 yuan per share. Based on this, the eight subscription parties had already suffered losses exceeding 10%.

Baodi Mining, also in the non-ferrous metals sector, also experienced a “drop below the issue price.” The company issued a private placement in mid-March at an issue price of 8.27 yuan per share, but by March 30, its stock had fallen to 7.6 yuan per share.

Looking at a longer timeframe, among refinancing projects from October 2025 to the present, besides the three companies mentioned above, another 16 companies have also experienced a “drop below the issue price,” accounting for nearly 20% of the total.

Brokerage M&A deals are also prone to “price inversion”

Not only companies that have already conducted private placements face “drop below the issue price,” but some listed companies that have recently disclosed M&A or private placement plans also encounter similar issues.

Wind data shows that, including private placement restructuring, since the start of the year, 118 listed companies have issued private placement plans, among which three have experienced a “drop below the issue price.” A notable brokerage M&A project—the issuance of shares and cash by Dongwu Securities to acquire 83.77% of Donghai Securities—had its transaction plan published on March 14, with an issue price set at 9.46 yuan per share.

However, after Dongwu Securities resumed trading, its share price declined for several consecutive days. By March 30, it closed at 7.78 yuan per share, a deviation of -17.76% from the issue price.

Securities Times reporters noted that the above plan from Dongwu Securities did not include an issue price adjustment mechanism. Public information indicates that the transaction involves as many as 61 counterparties, including state-owned shareholders, natural persons, and industrial capital. Whether the transaction details will be adjusted in the future and how they will be adjusted warrants ongoing attention.

Another brokerage M&A project—CICC’s share-swap merger of Dongxing Securities and Cinda Securities—also shows a “price inversion” phenomenon.

According to the transaction plan, CICC’s A-share share-swap price is 36.91 yuan per share, while Dongxing Securities’ and Cinda Securities’ share-swap prices are 16.14 yuan and 19.15 yuan per share, respectively. To protect dissenting shareholders’ rights, CICC’s A-share and H-share dissenting shareholders may exercise the tender offer right, with an exercise price of 34.8 yuan per share; dissenting shareholders of Dongxing Securities and Cinda Securities have cash options, with exercise prices of 13.13 yuan and 17.79 yuan per share, respectively. However, as of March 30, CICC’s share price was 32.59 yuan per share, while Dongxing Securities and Cinda Securities closed at 12.41 yuan and 16.38 yuan per share, respectively—each already below the prices specified in the plan.

Additionally, Guolian Minsheng, which carried out a private placement restructuring early last year, had a closing price of 9.15 yuan per share on March 30, also below the issuance price of 9.59 yuan per share stated in the restructuring plan.

It will take more time for the secondary market to regain strength

From the primary market perspective, a stable secondary market is more conducive to listed companies’ capital operations. Looking ahead, multiple research teams from brokerages believe that it will still take time for the secondary market to recover.

Huaxi Securities’ strategy team believes that, with continued policy support to stabilize the market and as the upcoming April Politburo meeting approaches, there will still be support below the index. However, sustained improvement in risk appetite depends on easing overseas disturbances and confirmation through increased trading volume.

Nomura Orient, in its second-quarter outlook, recommends investors pay attention to potential shocks from geopolitical conflicts and U.S. midterm elections. The firm believes that volatility in the A-share market may increase in the second quarter, and the growth theme’s trend may weaken somewhat.

CITIC Guotai Securities’ strategy team holds a different view. They believe that the trajectory of geopolitical conflicts is gradually becoming clearer, and the impact of external shocks is weakening. The internal logic of the market will increasingly dominate market pricing. On one hand, “fixed income +” products have not yet reached the “negative feedback” threshold during this round of maximum drawdowns; on the other hand, Chinese assets, due to their independent and secure nature, are attracting foreign capital back into the market. Therefore, the market’s focus has clearly shifted from “external sentiment games” to “internal fundamental recovery.”