Return to 1958 and build a century-old giant

Chapter 903 Investing in Pepsi
The huge transaction price of the new land king shocked the entire Hong Kong real estate market. The next day, the event immediately became the hottest news in Hong Kong, and all the newspapers reported on it on their front pages, including TVB news.
At the same time, Hong Kong's property market and stock market both experienced a surge, with a large influx of new funds, whether from investment institutions or countless brainwashed retail investors.
Yang Wendong didn't pay much attention to these things. He believed that the temporary market recovery could not stop the general trend. He also believed that Hong Kong's real estate and stock markets would inevitably collapse next year.

Kang Le Building:

"Come on, Lao Zhou, have a seat," Yang Wendong said with a smile.

Zhou Haoran said, "Thank you, Mr. Yang."

Yang Wendong asked, "John from Swire Group contacted me yesterday. What did he mean?"

After listening, Zhou Haoran said, "I don't necessarily intend to snatch Coca-Cola's orders, but the problem is that Pepsi knows we have invested in Coca-Cola and seems to be planning to abandon our cooperation after the contract expires."

If they do that, many of our contract manufacturers in Hong Kong, Taiwan, and Malaysia will have to stop production due to insufficient orders;
While Very Cola has gained some market share, it still lags far behind Coca-Cola and Pepsi.

“Hmm, this will be a problem.” Yang Wendong frowned and said, “Actually, although I have invested in Coca-Cola, I have a verbal agreement with its new CEO Robert that I will not interfere with Coca-Cola’s own operations.”
So even if you want to compete for Coca-Cola's OEM orders, you'll have to rely on your own strength. My connections are just icing on the cake, and I can't possibly ask for them."

“Given your status, it would be inappropriate for you to ask for such a small business deal,” Zhou Haoran quickly said.
Yang Wendong said, "That's what I think too, but Taikoo Group doesn't know that, so they still need our help. In exchange for free land development cooperation, it's not a loss for them."
As for Pepsi, we've been cooperating for many years and built so many factories together. It would be a real shame to lose that business.

Zhou Haoran asked, "This matter involves a struggle between two giants, Coca-Cola and Pepsi, and it seems there's nothing we can do about it."

Yang Wendong laughed and said, "Don't worry too much. There's something I can tell you in advance. In the United States, I not only bought Coca-Cola shares, but also some Pepsi shares, although relatively less. But after a while, they will reach the 5% threshold."

Although Coca-Cola has a higher rate of return, Pepsi's rate of return is also quite considerable;

With sufficient funds, he would naturally invest in multiple companies, and the returns would naturally vary, but as long as the returns were sufficient, it would be fine; it's impossible to buy only one stock with the highest return.

"What? We're about to become PepsiCo shareholders too?" Zhou Haoran was shocked after hearing this.

Yang Wendong said, "Just keep things stable here for now. When I go to the United States next time, I will meet with Pepsi executives and discuss this matter there as well."
I can't speak for other things, but maintaining the current cooperation shouldn't be a problem.

“Okay, I understand,” Zhou Haoran replied with a smile.

Certainly, money can solve 90% of the problems; the remaining 10% requires even more money.
It's a major taboo in business for one side to partner with Pepsi while becoming a shareholder of Coca-Cola. But if one side also becomes a shareholder of Pepsi, then there won't be any problems.

For Yang Wendong, Swire Group's petty schemes were a trivial matter.
However, the issue with Pepsi needs to be taken a little more seriously. After all, the contract manufacturer has been around for a long time. If the cooperation collapses, a large number of people will lose their jobs. At this critical juncture, Changxing Group is already preparing to gradually withdraw from Hong Kong, which will cause another wave of job losses. Either way, it's not good.

However, this problem was not something that Hong Kong could solve. So, that very evening, Yang Wendong made a phone call to the head of financial operations in New York, instructing him to begin a large-scale acquisition of PepsiCo stock.
"Mr. Yang, not going for the low-key approach? Going straight for a large-scale acquisition?" the person on the other end of the phone asked, trying to confirm. This style was quite unlike their usual approach.
Yang Wendong replied, "Yes, a direct acquisition would be faster. It's to let PepsiCo people know that we already have about 4.6% of PepsiCo stock, right?"

Back then, the profits from gold trading couldn't be kept in banks to earn interest; the US stock market was the best place to invest. Therefore, he selectively had his people invest in the stocks of various future top giants.

This naturally includes Pepsi, but it is not as high priority as companies like Coca-Cola and General Electric, so the acquisition is a little slower.
The person on the other end of the phone said, "Yes, it's about 4.68%, and it'll be 5% soon."

"The purpose of this acquisition is to prepare for my next trip to the United States to meet with Pepsi executives, so it doesn't matter if they know," Yang Wendong said nonchalantly. "Once we reach the 5% disclosure threshold stipulated by US law, we will immediately notify them and the Securities and Futures Commission."

While gradually acquiring target stocks will, in the long run, minimize financial costs;
But sometimes, time is money. For example, if a stock is rising every year, and a certain capital spends several years slowly acquiring it, it would be more cost-effective to just reveal the deal in the first year and acquire it at a premium based on the first year's price.

Not to mention, this also involves a small strategic objective;
"Okay, I understand." The other end replied, "Mr. Yang, how much do we plan to collect, and how long will it take?"

Yang Wendong said, "Within a month, we'll acquire 2-3 percentage points. That should be enough for them to know. As for what happens next, we'll see what happens in my meeting with Pepsi executives."

PepsiCo will also be a world-class beverage and food giant in the future. Its stock growth rate may not be as high as Coca-Cola's, but it is still very strong. No matter how much you buy now, you will not lose money in the future.
"Yes, Mr. Yang," came the reply from the other end of the phone.
In the following two weeks, Hongkong Land successfully signed an agreement with the Hong Kong government to acquire the largest plot of land in Central in history. At the same time, it also partnered with three banks, Hang Seng, HSBC and Standard Chartered, to lend the first tranche of HK$20 billion to the Hong Kong government.

For such highly valuable land, the Hong Kong government will not require all money to be paid upfront at the auction, as this would put too much pressure on any real estate company. Instead, it will follow business rules and set a timetable to settle the remaining payment within a specified period of one or two years.

However, even if the financial pressure is not great for the time being, the total debt remains unchanged, and Hongkong Land has directly increased its debt by more than 70 billion.
"Mr. Yang, according to the data we currently have, Hongkong Land Group's debt is approximately HK$160 billion."

Zheng Zhijie handed over some documents and said, "In recent years, Hongkong Land has acquired a large number of properties from us, acquired Hong Kong Telephone Company, participated in multiple government auctions, and handled the construction costs themselves, the renovation of several buildings in Central, the construction of footbridges, and finally, this land king." Yang Wendong asked, "So, are they planning to continue expanding? Or will they back down?"

Zheng Zhijie replied, "I'm not sure. They just acquired the land at the record price, so they haven't made any moves for the time being."

HK$160 billion is equivalent to more than US$30 billion in liabilities. This level of bad debt would be a huge problem for even the world's top banks.
Of course, Hongkong Land's liabilities are combined from multiple banks, but even so, given the banks' inherent prudence, they will certainly be very careful.

"160 billion, haha, not bad. Try to contact a few overseas banks with which we have good relations and encourage them to cooperate with Hongkong Land. I want to see how big Hongkong Land's appetite is," Yang Wendong said with a smile.

"The data we can access is also available to other banks. I estimate that any bank would have to be cautious when faced with this level of debt," Zheng Zhijie cautioned.
Yang Wendong nodded and said, "Yes, that's right. In that case, I will inject capital into Hang Seng Bank separately and increase Hang Seng Bank's shareholding to the legally allowed 44.9%, and then lend Hang Seng a sum of money."
"Wait a month or two, and Hang Seng can announce their expansion plans to see if Hongkong Land will take the bait. If they do, we'll continue our cooperation. If not, it probably means they themselves don't dare to expand further, and then we'll have a general idea of ​​the situation."

In the early years, Hong Kong law allowed the largest shareholder to hold 49.9% of the shares. Later, in order to protect British capital, it was changed so that the largest shareholder could only obtain 34.9% of the shares in the first year, 39.9% after two years, and 44.9% after five years.

This strategy allows the original major shareholder family to more easily control the family, while the acquiring party can only acquire 34.9%, otherwise it will trigger a takeover offer.
Yang Wendong was already a major shareholder of Hang Seng in his early years, so he could naturally reach the maximum limit.

However, this law also made it very difficult for Yang Wendong to target his ultimate goal, Jardine Matheson. After the law was promulgated, Jardine Matheson and Jardine Matheson held cross-control, with each holding more than 40% of the shares. This made it impossible for Yang Wendong, despite his immense wealth, to find a loophole to exploit.

Therefore, the only way right now is to take advantage of Niu Bijian and his group's optimism about Hong Kong real estate, and desperately increase their debt. When the economic crisis hits next year and land prices plummet, this disaster will be enough to crush the two companies.

Zheng Zhijie replied, "Okay, then I'll release the news and see how Landsea reacts. If that doesn't work, we'll offer some better properties to lure them in."

"Okay, show me the plan later and I'll confirm it." Yang Wendong thought for a moment and agreed.

You can't catch a wolf without risking your cub. While high-quality properties are certainly extremely valuable, once you successfully acquire land, the number of even higher-quality properties you can obtain can increase tenfold or even dozens of times.
Furthermore, even if the plan ran into problems, Hongkong Land still managed to weather the storm. During this process, it would inevitably have to sell the properties it had purchased at high prices during the economic crisis. It could also act as a buyer and make a profit by selling high and buying low, so it wouldn't lose money no matter what.

Everything is proceeding according to plan. In the entire Hong Kong, only Hongkong Land has caught Yang Wendong's eye. Once he acquires Hongkong Land, his layout in the Hong Kong real estate market will be almost complete.
In the future, he will gradually withdraw from the real estate market. On the one hand, he can rely on his most valuable properties to collect rent, which is much more profitable and easier than working hard to develop residential properties.

On the other hand, he has also used financial means to control the stocks of future Chinese-owned giants such as Sun Hung Kai Properties and Cheung Kong Holdings, letting them make money in the early stages while he enjoys the stock market dividends and gains.

In the future, there are still larger real estate markets in Japan and mainland China, which will be his main targets.

September arrived quickly, and the financial activities in the United States began to take shape. PepsiCo's stock trading volume suddenly increased, and the market immediately realized that someone was buying PepsiCo's stock.

However, this incident did not cause much of a stir. Ultimately, it is quite normal for a giant company to be favored by a venture capital firm by chance.

On September 3, Changxing Group published an advertisement in its New York branch in the United States, announcing that the group had acquired 5% of PepsiCo's stock. In accordance with legal requirements, the group made a public announcement and sent formal letters to the stock exchange and PepsiCo's headquarters. The group also stated that it would continue to acquire PepsiCo's stock.

PepsiCo's stock price surged immediately after the news broke.

Over the years, Yang Wendong's various investments in the United States have been mythologized by some investors, mainly because his investment success rate is so high that it is even better than many Wall Street funds. Therefore, the stocks he favors are immediately favored by many people.
PepsiCo responded immediately, stating that it welcomes investment from any investor and also welcomes Yang Wendong to visit PepsiCo to discuss the company's future development plans, etc.

Upon receiving the news, Yang Wendong immediately prepared to travel to the United States soon to discuss some cooperation with PepsiCo.
On September 10, Yang Wendong visited PepsiCo's headquarters in New York City and met with its CEO, Donald Kendall.

"Mr. Yang, hello, it's an honor to meet you," Donald Kendall said with a smile, shaking hands.

Yang Wendong replied politely in return, "Hello, Mr. Kendall."

"And this is..." The two then introduced themselves to each other, exchanged pleasantries for a while, and then got down to business. Donald asked, "Mr. Yang, you are already a shareholder of Coca-Cola, so why are you investing in Pepsi now?"

"I'm optimistic about the future of the cola industry, and the simplest way to do that is to invest in the two existing international giants, right?" Yang Wendong laughed. "Recently, PepsiCo's offensive against Coca-Cola has been very aggressive, and I'm also optimistic about PepsiCo, so investing in it is a very normal business practice. US law won't stop this, right?"

PS: Please give me a monthly ticket
(End of this chapter)