One of the main objections that I’ve recently received, relating to my plan to monitor Chinese acquisitions in Italy, is the following: “what if the current shareholder wishes to sell out? In that case, it seems clear that the government cannot put any obstacles and cause the transaction to fail because in that case, it is the seller, the old shareholder, that would forgo the opportunity to cash in”.
This is a fair objection especially if that target company is a private company.
My answer to this is to create a financial structure made up that of a mix of equity and bonds whose goal is to guarantee that the seller does indeed receive 100% of the value of his equity at the time of the transaction without actually having to sell 100% of the equity, rather my suggested 30%. By doing this we also put the cap on the maximum stake that the new owner can purchase.
Overtime then after verifying the three conditions:
- creation of jobs,
- new capital,
- market access
The equity investment can be converted into an equity investment up to reaching the original desire the goal of 100%.