This is the second part of the Solvent S.A. case. It describes what happened after Santos announced that he and his son would either sell all of their shares or buy shares until they owned 51% of the company. Shareholders were hit by another surprise when Dangond then decided that he did not want to be a minority shareholder so if Santiago were to sell, he would too.
Since the shareholders wanted to keep the company, they secured a loan to buy the shares but then the 42 percent group decided to reject their offer and to increase the price. They continued to negotiate the share price but it ended up being too high so the 58 percent group sold its total share in Solvent. Although they received a lot of cash, they ended up losing their company and breaking up their family.
This case is about Solvent S.A. and disputes between its shareholders eventually leading to a shocking turn of events. The beginning of the case gives details about the cement industry as well as information on how the company was started. When the company was founded, the shareholders included family members from the Salazar and Santos family and a family friend, Edgar Dangond. It describes how the there was a lot of trust between the shareholders and there was a family feel.
But then it goes on to describe how a series of disputes split the shareholders into two groups. The first dispute happened in November 2005, when there was a cash flow problem so the general manager, Dangond’s son, decided to delay the payment of dividends two weeks without informing shareholders. The shareholders were upset about this and included it as a point at their meeting. During this meeting, the general manager’s salary came up and things started to get ugly. While Santos and Dangond considered the salary to be acceptable, Salazar and his family considered it to be totally unrealistic. This split them into two groups.
The situation continued to go downhill leading to the approval of a new board. After yet another disagreement where Javier Dangond and Juan Santos were accused of working together too closely, Santiago Santos Prado shocked the shareholders during a meeting where he read a letter stating that the company culture had changed and there was no longer trust so he and his son wanted to either sell their shares or to buy more shares until they reached 51% and were no longer the minority.