Value Creation of Strategic Investors under Convertible Bond Investment—A Case Study of Wharf (Holdings) Limited

Abstract

This paper analyzes the case of Wharf’s participation in Greentown China’s corporate governance under the investment of convertible bonds, and brings the case of market value growth. It reveals that the strategic investors have passed the three stages of “value support—value driven—value realization”. The bond issuer realizes value creation and achieves a win-win situation for both parties. The study found that strategic investors and bond-issuing companies have complementary resources and positioning strategies to provide strong value support for cooperation between the two parties. The key processes driven by value include the investment phase and the corporate governance phase. In the investment phase, choosing the right financing method and designing the refined terms provide the basis for strategic investors to participate in corporate governance. In the corporate governance stage, strategic investors can restrain overinvestment by issuing sound financial policies bonds, and participate in the investment decision-making of bond-issuing enterprises to create business synergies. The realization of value is reflected in the two aspects of market value improvement and business improvement.