Chapter 722: Privatization of 9Longcang

Chapter 722: Privatization of 9Longcang

Chapter 722: Privatization of Wharf Holdings

Changxing Group cannot interfere in mainland China's affairs and can just let them deal with it on their own. According to market demand, they actually need to build a new production base as soon as possible.

It was April soon, and the oil crisis had ended for almost half a month, but the global economic market still showed no signs of improvement.

The stock market and economic consumption conditions in the United States, Europe, Japan and even many less developed countries are not very good, unless they are oil or other energy exporting countries.

The expectations of many stock investors in Hong Kong were also shattered. They hoped that the global economy would improve after the oil crisis, thereby driving the recovery of Hong Kong's economy. At worst, it could allow Hong Kong's industry to recover a little. But the reality was a slap in the face to them. Global economic decline is inevitable.

After more than a year, the Hang Seng Index has finally fallen from its peak of 1950 to its current 236 points, a drop of nearly 90%. This is no longer a halving, but a severe cut.

However, the real estate market did not fall that severely. The average drop in Hong Kong was about 50%, some places dropped by 60-70%, and some dropped by 30-40%.

This is the exact opposite of the situation in 1967, when housing prices fell by % to %, but the stock market was not that severe.

On the top floor of Kangle Building, Yang Wendong called Fang Xianming, who was in charge of finance, and Zheng Zhijie, who was in charge of real estate business.

"What is the highest stock price of Hutchison Whampoa in the past six months?" Yang Wendong asked.

Fang Xianming replied: “In the past six months, the highest share price of Wharf Holdings was in January this year, at HK$9.1 per share.

This is probably because our Changxing Group’s investment in Harbour City was not affected by the oil crisis, so the market is slightly more optimistic.”

"Well, 9.1 is not a lot. We have 6-8 every day. The time is almost up now. I plan to privatize it completely. What do you think?" Yang Wendong asked back.

When Wharf Holdings was acquired, its highest share price was about HK$30. In addition, many people in the stock market at that time were still full of expectations for the Cheung Kong Group. If privatization was initiated at that time, the cost would be very high.

Now the time is almost up. The six-month-long oil crisis has had a huge impact on Hong Kong's economy. The Hang Seng Index has been falling, and so are all the stocks. According to Hong Kong law, the privatization price only needs to be no lower than the highest price six months ago. In other words, now you just need to bid no less than 9.1.

Just looking at the bookkeeping data, this can save nearly 10 billion yuan. With such a huge amount of money, he only made a little more money when he invested in Hutchison Whampoa for many years. Now he can save so much in just half a year, which is still a profit.

And time cannot be delayed any longer, because due to the influence of the butterfly effect, he does not know when the economic crisis in Hong Kong will end.

Historically, the stock market would stop falling and rise only after it fell to 150 points, but this may not be the case now. If this day comes ahead of time, and Hong Kong stockholders, investors and even international investors regain confidence in the Hong Kong stock market, then if we initiate privatization again, we will probably have to pay a higher price even if the stock price is not high.

After all, just because you make a bid doesn’t mean others have to sell it. According to the law, only when the ratio reaches 90% can the remaining 10% of the price be enforced through the court.

If too many people refuse to sell, privatization will fail.

Fang Xianming and Zheng Zhijie looked at each other and said, "Mr. Yang, Wharf's Harbour City cost a lot of money. If we privatize it, it will put too much financial pressure on us internally."

"That doesn't matter. I will contact several banks for financial loans. As for the guarantee, if you don't have enough, I will personally participate." Yang Wendong said with a smile and waved his hand.

In this era, no one can guess the future performance of Harbour City, nor the future economic situation of Hong Kong, so facing the Harbour City project with a total investment of nearly 20 billion, everyone feels a little scared.

This is also true for banks. If such a large project suffers losses, even HSBC will suffer the consequences.

I have to say that I don’t know how Jardine Matheson dared to launch such a project back then, but since it was pushed forward, it was built so slowly, which was a waste of time and energy. In the end, whether now or in the previous life, other Chinese companies reaped the benefits.

Zheng Zhijie nodded and said, "If that's the case, then there won't be any problems with the real estate business."

Fang Xianming said: "Then there is no problem on my side. Previously, our Hong Kong funds have also invested in some overseas oil field companies. Although the amount is not much, the rate of return is not low."

Before the collapse of the Hong Kong economy, Changxing Financial began to cash out a large number of stock stocks, especially Hutchison Whampoa, which alone gave them a profit of more than HK$10 billion.

When the subsequent economic crisis broke out, with the authorization of Yang Wendong, part of these funds were dispersed and invested in stocks of various oilfield enterprises. The average rate of return was about 50%, and after deducting taxes, a profit of more than million yuan was made.

Combined with the capital, it should not be difficult to privatize Hutchison Whampoa. Besides, for such a thing, one can also get a loan from the bank.

Yang Wendong then asked, "I remember that we have about 60% of the shares, right? In other words, we only need to acquire the remaining 40%?"

In order to be sure of snatching Wharf Holdings from Jardine Matheson, he deliberately concealed his intention and acquired nearly 10 points more stocks. This was also thanks to the management of Wharf Holdings at that time, which raised funds multiple times, otherwise it would have been impossible.

Fang Xianming replied: "Yes, to be exact, it is 30%. The remaining 10% is a matter of funds, not willingness."

Yang Wendong asked again: "Yihe still has more than ten points of stocks, have they sold them? Otherwise, they will be in trouble for the stocks they hold." Fang Xianmin said: "They have sold them, but I don't know who they sold them to, and I don't know the transaction price.

But as long as it is out of their hands, it is also a good thing for us.”

“Okay, then we need to act quickly. We’ll immediately make a public acquisition of some shares and then inform the Hong Kong Stock Exchange that we plan to privatize Hutchison Whampoa at HK$9.1,” Yang Wendong nodded.

Fang Xianmin smiled and said, "Okay, but the final transaction price will definitely be more than 9.1."

"I know. Let's test the market first, and then we can gradually decide how much to raise the price." Yang Wendong said with a smile.

Privatizing a company is actually also a game process, but it is not a game with other major shareholders, but a game with countless other shareholders.

Some shareholders may take profits while they can and sell when the price is right, while some may wait until the price is a little higher. However, if the final price is too high and the privatization party gives up, the stock price will inevitably plummet, and may even fall to a price lower than before privatization.

Because according to the law, if the privatization fails, the previously acquired shares must be sold, and the shareholding cannot exceed 49.9% of the largest shareholder of the Hong Kong Stock Exchange.

Therefore, if you want to get a high price, you have to take risks. Although there are many scams in the stock market, there is one thing that is completely eternal, that is, risk and return are always inversely proportional.

Fang Xianmin agreed: "Okay, I'll arrange it right away."

……

The next day, when no one was paying attention, an appropriate buy order was suddenly placed for Wharf Holdings’ stocks, and this time the ordering party directly disclosed its name: Changxing Group.

"Why is Changxing Group still buying Wharf shares? Aren't they afraid of triggering a takeover offer?"

A number of shareholders were very puzzled. You know, after Wharf Holdings was acquired by Cheung Hsing Group, it carried out targeted share increase financing with the approval of the board of directors, which enabled Cheung Hsing Group to control 49.99% of Wharf Holdings' shares, thus completely consolidating its control over Wharf Holdings.

The funds obtained will also be used to build Harbour City, which can be said to kill two birds with one stone.

But at this time, if they openly acquire Wharf shares, wouldn’t that mean they must hold more than 50%? According to Hong Kong law, once a company controls more than 50% of the shares, it must trigger a takeover offer.

“Could it be that they did this on purpose, wanting to privatize Wharf Holdings?”

Someone immediately put forward a new point of view, saying that large companies like Changxing Group have professional legal affairs and are unlikely to make such low-level mistakes.

"Of course it is. Otherwise, there is no need to buy more shares. We already have full control of the company."

"Everyone hurry up and buy more now, so that when the price goes up, everyone can make more profit!"

Many people said excitedly.

Unlike other industries, the special thing about the stock market is that the more people who buy a stock, the higher the stock price will be, and ultimately everyone will benefit the most, which is a win-win situation for all.

Especially when it comes to privatization of such large groups, they generally will not give up until the very last moment. With a backup plan, they will be even bolder.

Many people who dare to get involved in the stock market are very courageous. They jump in when the time is right. Otherwise, if they hesitate, they might as well screw in a screw...

As a result, a large number of investors immediately lined up to buy Wharf Holdings shares. The news spread quickly, and other investors far away also began to remotely notify their stockbrokers by phone to buy Wharf Holdings shares.

The stock price of Hutchison Whampoa gradually rose from HK$7.2 in the morning to HK$8 at noon. A large amount of funds were ready to enter the market, and it seemed that the stock price would continue to rise in the afternoon.

Such a big event naturally alarmed the media, and they soon received news that Hutchison Whampoa would hold a press conference on important matters at 3 pm.

At three o'clock in the afternoon, many reporters came to the Wharf headquarters building in Tsim Sha Tsui and entered the conference room.

After the meeting started, Fang Xianmin did not beat around the bush and said directly: "Dear journalists, my Changxing Group has officially decided to fully privatize Wharf Holdings."

……

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(End of this chapter)