What's wrong with me being a rich man?

Chapter 442 Hostile Takeover
The action of crossing the mountain peak needs to be carefully considered.

Unlike previous cases with varying degrees of actual evidence and investigations, the situation at Vania Pharmaceuticals is quite unique, and what is now presented is more of a subjective bearish sentiment.

With the Spring Festival approaching, Yu Xing had a lot of free time in Lingang, so he took the opportunity to study and weigh the current situation more carefully.

Ackman, the founder of the well-known hedge fund Pershing Square, although he is on the bullish side in this mountain peak target, he is actually a well-known short seller. He started shorting as early as 2003 and made a name for himself by shorting MBIA, the largest bond guarantee company in the United States, during the subprime mortgage crisis in 2008.

To date, Pershing Square manages over $120 billion in assets, making it a true star fund on Wall Street.

Therefore, if Guoshanfeng wants to damage the stock price of Vania Company, it will inevitably be met with extremely solid bullish capital support.

Since leaving the mountain, Guo Shanfeng has never suffered a defeat, which was Yu Xing's initial reliance for stirring up trouble. However, it is indeed difficult to predict the extent to which it will play a role.

After weighing the pros and cons for two days, Yu Xing was inclined to start by cracking down on the car companies that had falsified emissions data.

However, the world-renowned Ackerman publicly praised the development of Vania Pharmaceuticals on January 27, speaking highly of the Canadian company, which immediately made Yu Xing somewhat nervous.

As a former aspiring medical professional, Yu Xing instinctively felt a strong aversion to Vania's radical approach.

Furthermore, as the operator of multiple projects including Guiai.com, Baixiaosheng, WeChat, Silicon Carbon Group, and Silicon Carbon Data, he also does not approve of Vanlia's business model continuing to develop so aggressively.

This "disapproval" is the "subjective" basis for Guoshanfeng's consideration this time.

After repeatedly reviewing the information he had gathered about Vanya and Ackerman, Yu Xing expressed his opinion: "Xiao Ying, I think we can still give it a try. At worst, we can just cut grass without investing any money."

“Mr. Yu, this is not an option.” Liu Wanying read Yu Xing’s expression and said seriously, “Either don’t do it, or if you do it, you have to invest money. Don’t give me any more options.”

Upon hearing this, Yu Xing also became more decisive: "Then let's give it a try, but don't invest too much."

Liu Wanying asked, "The reason?"

Yu Xing's eyes gleamed with a wicked light: "We lost, but only by a small margin. If he loses, it will be a crushing defeat."

Liu Wanying hadn't expected this reason and couldn't help but chuckle: "This might not necessarily benefit you personally, but it definitely has to hurt others..."

“This is a clash of different ideas about business models,” Yu Xing said. “In addition, I don’t think we are the only ones who think that Vanlia’s model is abnormal. Just like when I run Silicon Carbon Group, I need to make a name for myself. With Guo Shanfeng stepping forward this time, other short sellers who have been silently hovering around Vanlia may also rush in.”

Liu Wanying nodded gently.

She genuinely felt that the choice between Guoshanfeng and Fanliya was ambiguous, and since Boss Yu was willing to make this choice, then so be it.

Liu Wanying mentioned a piece of news from two hours ago: "Mr. Yu, Ackerman's fund has spent nearly $17 billion to acquire 5% of Allergan's stock. This is the known fact. What is unknown is whether he also holds shares in Vania, because it may not have reached the threshold."

"At 6 o'clock, Allergan's board of directors publicly accused Ackerman of acting without the company's consent and believed that Ackerman and Vania's simultaneous acquisition of shares was a hostile takeover."

Yu Xing was taken aback: "Ackerman is going to team up with Vania to launch a hostile takeover of Allergan? So it seems that Allergan is strongly opposed to this potential takeover? Does that mean it's currently close to our position?"

“That’s right, that’s their latest stance, but it’s hard to say whether the price is just right,” Liu Wanying said seriously. “Moreover, Allergan’s board of directors cited one reason for opposing the acquisition as Vania’s reliance on high leverage and aggressive price increases for development, which is completely in conflict with its R&D-driven strategy.”

Ackerman is a shareholder of Allergan and is required to disclose his 5% stake in the company recently. Vania has not yet reached 5% but has expressed its intention to acquire Allergan. Allergan, which was previously silent, officially spoke out today to express its opposition.

Currently, Ackerman has spent nearly $17 billion, and Vania has not yet disclosed the relevant amount, but the two companies combined have moved at least $20 billion.

As for Allergan, its current market capitalization exceeds $340 billion. This means that if the acquisition goes through, it will be worth at least close to $400 billion, and could be even more considering the premiums typically paid in hostile takeovers.

Liu Wanying explained in detail the hostile takeover situation, discussing the roles played by Vania and Ackerman, as well as the possible countermeasures that Allergan might take, including but not limited to poison pills and finding a white knight.

This hostile takeover will inevitably have far-reaching consequences.

"Interesting. I knew we weren't the only ones who thought Vania's model was flawed." Yu Xing digested the information and said thoughtfully, "If we get involved, could we be helping Allergan? Conversely, could Allergan also be helping us, openly or secretly?"

Liu Wanying nodded; that was very likely.

The industry standard for dealing with hostile takeovers is to find a white knight, which means finding a third party with the same stance to increase shareholding. If the evil short seller Guoshanfeng shows up, although he is not exactly a white knight, he can still be considered a dark knight.

Yu Xing smiled and said, "Then it's even more worth trying."

“I originally considered a position of around $20 million for this trial,” Liu Wanying said, referring to the contingency plan. “Now that Allergan has such clear opposition, I think we can increase it to $30 to $40 million.”

Yu Xing agreed to this level of increase.

If you lose this portion of your principal, you can consider using some more Bitcoin, which would make the potential collapse of the car company much safer.

He reiterated his increasingly firm assessment: "Like Allergan, we're not the only ones watching Vania; its business model is just not right."

“Let’s make this hostile takeover storm even bigger first.” Liu Wanying’s mind was already on how to make her move. “Although Ackerman has a dazzling aura, he is not without rivals. Last year, he had a big dispute with another well-known fund manager, Carl Icahn, over shorting Herbalife. The two had a grudge back in 2003.”

She casually mentioned Carl Icahn, a man with a unique style, known as a "corporate predator" and also called the "Wolf King of Wall Street," who prefers hostile takeovers to seize control of companies he deems undervalued, and then sells them for arbitrage.

In recent years, one of Carl's notable moves was to buy Yahoo's stock after Yahoo rejected Microsoft's acquisition offer, then demand the removal of Jerry Yang and the entire Yahoo board, ultimately succeeding in making Bartz the new CEO.

Yu Xing listened to this series of introductions with great interest and couldn't help but sigh, "They come from all walks of life, I can imagine the controversy he's faced."

Liu Wanying's attention was mainly focused on the feud between Carl and Ackerman. She said with some regret, "It's a pity that we can't reveal our identities. Otherwise, it would be much easier to contact each other secretly. Our current contact might not attract attention."

Yu Xing smiled and said, "The public questioning of Guo Shanfeng is the best signal."

Liu Wanying thought about it and realized it made sense. People like Carl and companies like Allergan would weigh their options and act based on their own perspectives.

After a moment's thought, she gave a timeframe: "After the New Year, we'll sharpen our knives and let the public test their edge one last time."

Yu Xing has also wanted to work with the public for a long time.

However, while Lingang has finalized its decision and is preparing for action, LeEco, which had previously visited the Silicon Carbon Group, has brought new topics to the automotive industry before the Lunar New Year.

Just before the holiday season, LeEco officially announced its decision to enter the automotive industry, aiming to integrate "LeEco Auto" into the LeEco ecosystem and develop "Internet+" electric vehicles.

Carbon Silicon Group was naturally not mentioned in LeEco's official announcement. However, Yu Xing quickly received a call from LeEco inquiring about the possibility of implementing integrated die casting. They even talked about Carbon Power Company acting as a supplier after only a few words.

Yu Xing welcomed the cooperation and mentioned the progress of die-casting machines, but did not mention the situation of aluminum alloy materials, nor did he mention the difficulties that Carbon Power Company faced in terms of supply cycles.

Anyway, it's all just storytelling, and LeEco probably doesn't care about these things. As for whether they will get stuck at this stage later, we'll have to wait and see.

(End of this chapter)