Chapter 648 It’s all under control

Chapter 648 It’s all under control

Chapter 648 It’s all under control
Since it is different from the original history, Yang Wendong can really watch the show as an outsider, because both parties are now using funds, which will be very similar to his future acquisitions. After all, there will basically be no stock-for-stock swaps in his future acquisitions.

The consumption of funds on both sides, the increase in stock prices, the reaction of social shareholders, the feedback of some shareholders, and the response of the Hong Kong government or large financial groups will all be good precedents for your own reference;
In the past, some M&A cases in Hong Kong’s business history have been recorded in writing and can be found on the Internet, but those written records are just the tip of the iceberg. It is better to experience the real process in person.

On the third day after the merger, Hong Kong Land Group called on Dairy Farm shareholders to sell their shares to Hong Kong Land on the front pages of many newspapers. It also rented tables at four exchanges in Hong Kong for on-site purchases. In addition, it also had a large number of advertisements in many shopping malls in Central. Every tourist who went to the malls could see the advertisements for the high-priced purchase of Dairy Farm shares. This was also Hong Kong Land's advantage.
Similarly, Dairy Farm International was not to be outdone and advertised in other newspapers, calling on shareholders to either sell their shares to Dairy Farm or keep them for themselves. It also announced that the company was already preparing to enter the real estate market and develop its own large amounts of land in Causeway Bay and Bofulang. Obviously, they also knew that the fundamental purpose of Hong Kong Holdings' acquisition of Dairy Farm was to acquire these high-quality lands.

As the largest TV station in Hong Kong, TVB naturally got involved. Now, this matter is also an event that most people in Hong Kong are paying attention to. Even those who don’t own stocks like to join in the fun. After all, this is the first such large-scale merger in Hong Kong’s history.
With the publicity from all media, the share price of Dairy Farm doubled in 4 days, and its market value exceeded HK$15 billion. To complete such an acquisition, it was also a huge pressure for the Hong Kong Land Development.

Jardine Matheson Group Headquarters:

Henry Keswick looked at the pile of newspapers and the people standing in front of him, frowned and said, "We prepared 2 million in cash, and it was wasted just like that?"

A blond man replied, "Not yet, Mr. Keswick, it's just that the increase in the share price of the Dairy Farm Company has far exceeded our expectations. Too many people rushed in to buy the shares, causing our purchase price to become increasingly high. At the current price, it would be too much of a loss to continue to purchase, and the risk is too high.
Although we can still borrow funds from HSBC, if we do so, it will affect the future funding of Hutchison Whampoa and even Jardine Matheson in various other areas.”

"It should be the same for the Dairy Company, right?" Henry Keswick asked.

The blond man replied, “Yes, their acquisition also cost a lot of money. I estimate that their funds should be almost gone. It is said that they have already borrowed short-term loans from many banks, and the interest rate is also very high.
It’s just that they are the defending party and hold the company’s equity, and if we want to complete the acquisition, we need to acquire enough shares.”

After listening to this, Henry Keswick frowned and said, "It seems that it is indeed impossible to acquire a company like Dairy Farm International with just funds."

Even though Hong Kong Land's market value is seven or eight times that of Dairy Farm, once it comes to a public takeover, if you want to succeed, even if you don't need 100% of the shares, you still need funds that are at least not less than the other party's previous market value;
Before, the market value of Dairy Farm fluctuated around HK$6 million. It was not impossible for Swire Properties to come up with such a large amount of funds, but it would have to pay a very high price, affecting other businesses, or it would have to sell some high-quality properties.

The blond man said, "How about we use our previous plan and exchange shares for shares?"

"Stock-for-stock swaps do save money, but this will reduce the control of Jardine Matheson Holdings over Hong Kong." Henry Keswick said with some concern: "There is Yang Wendong in Hong Kong and other large financial groups overseas. I am worried that they will take advantage of the opportunity to take action against Hong Kong."

The top executives of Jardine Matheson Group are not fools. They probably know about Yang Wendong's strength. If they can take action against Dairy Farm International, it is hard to say whether they will take action against the Jardine Matheson Group.

The blond man replied: "Although Yang Wendong's financial strength is very strong, perhaps not inferior to that of Jardine Matheson, it is impossible for him to acquire Hong Kong Land. Even if we want to acquire Dairy, it is so difficult. How can he do it?

Moreover, we can work hard to increase the share price of Hutchison Whampoa. On the one hand, we can acquire Dairy Farm International at a low cost. After the share price rises, we can cash out and obtain a large amount of funds to suppress Hutchison Whampoa's share price. After Hutchison Whampoa's share price plummets, we can return. In this way, we may not only acquire Dairy Farm International at almost zero cost, but also make a lot of money and keep the control of Hutchison Whampoa.

After that, we will find a way to increase the share price of Jardine Matheson, and then Yang Wendong will no longer have any ideas, and our worries will be unnecessary."

"Your method is theoretically feasible." Henry Keswick thought for a moment and said, "Now all the stockholders, small shareholders, and small companies in Hong Kong have participated in this matter. Unexpectedly, it has hindered our plan to acquire the Dairy Farm Company with cash.

But these people’s madness can also be exploited. As long as we operate well, we can completely absorb all their funds into our hands through legal means.”

The blond man laughed and said, "These small stockholders only make a few hundred or a thousand dollars a month, and they dream of getting rich from stocks and never having to work again. However, their cognition is too low, and they always think they can make a lot of money in the stock market.

But they didn't know that during the bull market, they just made a little money by the way. Those who control the stock market are always listed companies or some big dealers. "The other people also laughed. The Hong Kong stock market is just an ATM for tycoons. When they have no money, they go to make a fortune. Even during the bull market, there are always a lot of people who lose money.

Especially those who are greedy, changing this stock today and that tomorrow, always believe in some rumors, but they don’t know that these rumors are often released deliberately. On the contrary, those who specifically buy a stock for long-term holding are more stable; of course, it is also possible to lose money, which depends on early choices.

Henry Keswick thought for a moment and said, “Okay, then we will implement Plan B and exchange shares for shares, but don’t rush. We will postpone the purchase of Dairy Farm shares and use the money to increase the share price of Hutchison Whampoa first.
Then they released news in the media, describing that the rent in Central has increased significantly, international funds are optimistic about Hong Kong, and office space is in short supply. In addition, they published the financial data of Hong Kong Land in the previous quarter, and released some false news, saying that Hong Kong Land will cooperate with the Hong Kong government to develop places such as Causeway Bay and Tsim Sha Tsui. They made up whatever they wanted. In short, they had to find a way to get a large amount of funds to buy Hong Kong Land's shares.

When our stock value goes up, we will then conduct a stock-for-stock swap.”

"Yes, Mr. Keswick." Several people agreed.

Henry Keswick glanced at the picture in the newspaper in front of him again. It showed many stockholders desperately buying milk stocks. He snorted coldly, "These people want to take advantage of my land. I will let them invest all their funds in the land, and then they will be left with nothing."

On April 4, Hong Kong Land suddenly withdrew its desks at the Kowloon, Far East and Gold and Silver Stock Exchanges and continued to purchase Dairy Farm shares only at the Hong Kong Stock Exchange. At the same time, the price was the same as yesterday, which was completely different from the previous daily increase in the purchase price.
Many stockholders panicked when they saw this and went to ask about the strategy of Hong Kong Land, but the person in charge of buying the stocks was just a junior clerk, so he had no idea what the above meant and naturally could not tell them.

There were rumors in the market that Swire might abandon its plan to acquire Dairy Farm. Regardless of whether it was true or not, some reporters immediately wrote it into the emergency supplement at noon. As a result, Dairy Farm’s shares plummeted. Many investors lined up at the Hong Kong Stock Exchange, trying to sell their shares quickly, especially some who had bought in at high prices.

At the same time, various good news about Hong Kong Land gradually came in. A large amount of funds began to purchase Hong Kong Land shares, and its price began to rise sharply. Even the Hong Kong government suddenly announced a series of strategies to attract foreign investment, including preferential treatment for leasing office buildings in Hong Kong Island.
As a result, any listed company with properties in Hong Kong Island is welcomed, and as the largest property owner in Central, Hong Kong Land Development is naturally the first to be affected.

Changxing Group Headquarters:

Yang Wendong has also been keeping an eye on the share prices of Jardine Matheson and Dairy Farm during this period. Seeing the current situation, Yang Wendong said, "I feel that Jardine Matheson is preparing to raise its share price."

"It's expected. We secretly arranged for Hang Seng Bank to provide the Dairy Company with sufficient credit. The Jardine Matheson Group will definitely not be able to afford it." Fang Xianming replied with a smile.

Yang Wendong nodded and said, "Then we will proceed according to the plan. If the Hong Kong Crown Land starts to exchange shares for shares, then all of our Dairy Farm International shares will be exchanged, and we can also become shareholders of the Hong Kong Crown Land."

In order to ensure today's smooth sailing, he agreed not to directly help the Dairy Company. However, it was not a problem to arrange for Hang Seng Bank to lend money to the Dairy Company. This itself was basically risk-free, because even if the risk was high, Hong Kong Land would have to take responsibility once the acquisition was successful.

Even if Hong Kong Holdings gave up, Hang Seng Bank would not lose money given the value of the large amount of land owned by Dairy Farm.

"Okay, now we just have to wait for the announcement from Jardine Matheson." Fang Xianming said with a smile.

Yang Wendong said: "It will probably take a few days. If I were Hutchison Whampoa, I would definitely push up Hutchison Whampoa's stock first, then deliberately keep silent and suppress the Dairy Farm's stock.
You should not do nothing on your side. The share price of Dairy Farm has fallen, so we can take the opportunity to acquire some of it, so that we can exchange more of our shares for Hong Kong Land in the future."

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(End of this chapter)