Chapter 327 The enemy of my enemy is my friend

Yang Wendong replied: "As for the shares, I want to invest 30%. The amount will depend on the audit of your company later."

Although I have checked some information before, it is all superficial. Before actually investing, I must check all of it. After all, it is not a listed company, and many financial and operating data are not reported to the outside.

The two brothers of the Wu family looked at each other, and then Wu Zhan De said, "Mr. Yang, this ratio is a bit too high."

"Then how much are you willing to sell?" Yang Wendong asked again.

"15%. This is the bottom line for the two of us brothers," Wu Zhan De replied.

Yang Wendong asked curiously, "Why is it just this little? This little bit of shares can't be exchanged for much capital. Now Jardine Matheson is forcing you a lot."

Wu Chan-tak said, "My two brothers are also planning to list the company in the future. If we give up too many shares now, there may be problems in the future. Mr. Yang should understand, especially now that Jardine Matheson is keeping an eye on us."

"You are right to think so." Yang Wendong nodded and said, "But you don't have to worry that I will sell my shares to Jardine Matheson. Both Jardine Matheson and I own supermarkets and we are competing with each other.

In the real estate sector, there have been some conflicts. Although the relationship is not bad, it is not very good at least. "

Wu Zhan De said, "Mr. Yang, I'm not being overly suspicious, but in the business world, there are no absolute friends or absolute enemies. Two mortal enemies today may work together on a project tomorrow. This kind of thing is not uncommon."

"You are right." Yang Wendong smiled.

Not to mention between companies, this is also true between countries. A few years ago, there might be a big war, but a few years later, they become friendly countries again.

Historically, Pao Yue-kong took over Hutchison Whampoa and had a falling out with Jardine Matheson, but they started working together again a few years later. It was all for the sake of profit.

The conflict between me and Jardine Matheson is nothing at all.

Then he continued, “This is a reasonable consideration for the future, but shouldn’t we consider the present? Even Carrefour cannot benefit from the real estate assets of Hong Kong Land. You don’t have enough funds, and you will lose all your assets under the targeting of Jardine Matheson.”

Wu Zhande replied: "Mr. Yang is right, but if that's the case, then even if you invest 30%, it won't be enough, right?"

"Well, that's a good point." Yang Wendong praised, "So maybe in addition to investment, we can also reach a better cooperation."

"What cooperation?" The two brothers of the Wu family also became interested.

Yang Wendong said: “I think you all know the popularity of Carrefour, and my idea is to open a pastry shop inside Carrefour.

In this way, you can gain a large number of customers, and I can also provide more products to Carrefour customers, killing two birds with one stone."

In this era when supermarkets were just beginning, they were actually large grocery stores. Not to mention pastry services, they didn’t even have cooked dishes.

In the early days, Yang Wendong did not want to do it all at once. Firstly, it was not cost-effective from a business perspective, and secondly, these foods involved safety issues and needed to be introduced slowly and cautiously.

As for making it yourself, that is not very possible. In its previous life, Walmart also introduced professional pastry shops, food companies, etc. At most, you could make very common and nothing special grilled sausages, roasted chicken, coffee, etc. yourself.

Every profession has its own expertise; it is impossible to do everything by yourself.

"Open a pastry shop in a supermarket?" The Wu brothers were shocked by this idea. They had never thought about it before.

Subconsciously, supermarkets should sell daily necessities, right? At most, they sell vegetables and fruits, but how come they also have a pastry shop?

But if you think about it carefully, it’s a good idea.

Yang Wendong added: "Carrefour now has 35 stores in operation and 7 stores to be opened, covering major towns in Hong Kong and Kowloon. In the future, we will continue to expand and build new stores in each town.

If Maxim's cooperates with us, it will basically be equivalent to adding dozens or even hundreds of stores with very large traffic, isn't that better?"

"This is indeed a very good cooperation." The two brothers of the Wu family were really tempted.

In terms of popularity, Carrefour's interior is probably much stronger than some core locations in Central.

Yang Wendong went on to say: "However, this is also considered normal cooperation. The price of this kind of position in Carrefour is not cheap, and everything is based on the market. Even if I invest in your company, this cannot be less. At most, you have priority."

Not to mention the companies he invested in, even for his wholly-owned subsidiaries, he still had to pay money normally for business cooperation with each other, and at most he could get some discounts.

Unless Yang Wendong personally gives an order to transfer some assets.

But generally speaking, he would not do this. This situation only occurs when a new business is starting up. Otherwise, for a company that is already operating smoothly, all transactions are normal.

"It's good to have priority." Wu Zhande replied: "If that's the case, I need to go back and discuss it with my brother, but I would like to ask Mr. Yang to agree to one more condition for us."

Yang Wendong asked, "You say."

Wu Zhan De said: "No matter how many shares we sell to you, I hope that if you sell again in the future, our Wu family will have the priority to buy them back."

"Well." Yang Wendong thought for a moment and said, "It means there are restrictions on my investment. I also need to think about it. We can decide when we negotiate later. How about that?"

This kind of stock sale and matching priority redemption mechanism is also very normal in some business cooperation, which is also to protect the interests of the seller. However, there are usually other conditions to hedge the exchange, otherwise the acquirer will not be subject to this restriction for no reason.

"Okay." Wu Zhan De thought for a moment and said, "Then let me go back and ask a lawyer to draft a memorandum of understanding on cooperation. After it is signed, we will provide the company data and you can come to review it.

After the valuation comes out, we can consider the specific details of the cooperation.”

A memorandum of understanding is actually similar to a gentleman's agreement, which guarantees some data exchanges and business secrets before future cooperation. Otherwise, if the acquisition negotiations ultimately fail, the acquirer will have mastered many of the other party's business secrets, which will be very disadvantageous to the acquired party or the investor.

This document must be signed before any commercial or even national cooperation, and is considered the first step and prerequisite for formal cooperation.

"Okay." Yang Wendong agreed, "Try to be quick. I don't want to delay it for too long."

Carrefour itself faces competition. In the early days, when there were few stores and there were no conflicts, normal operations were sufficient.

But now in places like Central and Causeway Bay, the customer coverage of both parties has overlapped, so we need to add some more attractive commercial services, pastries being one of them.

However, if I do this, my competitors will be able to copy me directly, so I have to do my best. Maxim's Food was able to become the number one catering group in Hong Kong in its previous life, so it was naturally my best choice.

Not to mention, his investment can make a profit and support his price war with Jardine Matheson. Although this scale will not have much impact on Jardine Matheson, it may help to have a little impact.

"Okay." Wu Zhan De agreed and said, "I will also sort out the financial data in the next few days."

"Then I hope we can have pleasant cooperation in the future." Yang Wendong smiled, stood up, shook hands and said.

Afterwards, they chatted for a while about catering business, and then the two people from the Wu family said goodbye and left.

After Liu Huayu and Zheng Zhijie saw the two off, they returned to the boss's office.

Yang Wendong asked with a smile: "How do you feel?"

Zheng Zhijie replied: "I feel they should agree. At most, they will have some issues with the details of the cooperation."

Liu Huayu also said: "Yes, Jardine Matheson has too many properties in Hong Kong Island and has strong capital. With such a scale, even Carrefour has to avoid it.

Even if I run my business well and keep costs low, I can’t beat the advantages of other people’s properties; not to mention Maxim’s, the pressure must be huge.”

"Yes, if you have your own house, you will be halfway to success in any service industry." Yang Wendong smiled and said, "But don't worry too much. In a few years, even if Changxing Real Estate cannot surpass Jardine Matheson, it can still reach the same level."

The closer a place is to a commercial center, the higher the proportion of rent costs in operations will be. This is the case everywhere.

Zheng Zhijie said: "I understand. Our current strategy is to own the properties ourselves. Once the scale is increased, this weakness will be gone. At that time, it will depend on whether Hong Kong Land is willing to continue to support Yifeng Supermarket indefinitely and burn money."

When one party is better at operations than the other party and both of them own properties, a price war will start and then it’s time to compete in operations.

"Well, we need to improve our operations." Yang Wendong asked again, "How are the prices of the cheap goods such as eggs and rice that we mentioned earlier?"

Liu Huayu replied: "Now, in terms of eggs, we have achieved the lowest price in Hong Kong. From feed import, sea transportation, chicken farming, to transportation within Hong Kong, we do everything ourselves, except chicken farming, where we have invested in several chicken farms.

As for rice flour, we can’t say it’s the cheapest, because there are many varieties of rice, some are cheaper than others, and we purchase from Europe and the United States following China Resources, so we can’t say the price is the lowest either.”

"Well, okay, the staple food is indeed not single, but eggs are." Yang Wendong nodded, and then said: "In addition to this, we also need to improve our service a little bit. Introducing Maxim's Food is one direction, but in addition to this, we also need to make cooked food."

Chinese people all like cooked food very much, and Yang Wendong used to buy it often to satisfy his cravings in his previous life.

"Cooked food?" Liu Huayu immediately understood: "I understand. There are many well-known cooked food shops in Hong Kong. I will also introduce them here."

"Yes, all these cooked foods are gathered together, which is very attractive to customers." Yang Wendong said: "It can also increase Carrefour's revenue."

After decades of exploration, supermarkets in China, Europe and the United States now have various delicatessens inside, because this is truly a win-win situation for all parties.

Now that supermarkets have been around in Hong Kong for a few years, it’s time to increase their appeal.

Zheng Zhijie said, "Mr. Yang, this is a very good idea, but can Yifeng copy it as well?"

"Yes, it is possible." Yang Wendong replied: "But we are still one step ahead, so you will arrange people to find the most suitable century-old store, sign an agreement with them, and introduce our supermarket.

In addition, if they invest in shares or buy it directly, then even if Yifeng copies it, they can only choose others.”

Liu Huayu agreed: "I see, the key is that we have to find the best delicatessen first."

"Yes." Yang Wendong nodded and said, "In the food industry, taste is everything. It all depends on your vision."

"Okay, I'll go find it right away." Liu Huayu agreed.

Yang Wendong added: "Okay, also keep an eye on Mei Xin. The enemy of my enemy is my friend. I plan to invest heavily in them as well."

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(End of this chapter)

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