What's wrong with me being a rich man?

Chapter 444 Dark Serpent
The first day of February was the second day of the Lunar New Year. Yu Xing had a relaxing and enjoyable holiday this year, spending a lot of time playing with his teacher Liu Jingrong's two children and chatting with his teacher's wife Yan Lirong about interesting things that happened at work over the past few years.

He would sometimes go to Nanjing with Xiaoying, but the trip was always rushed, especially after the establishment of the Silicon Carbon Group, which took up most of his energy.

“Yu Xing, you’re really something now… what do you call this?” Yan Lirong found it quite interesting. “This is the demeanor of a grandmaster.”

Yu Xing chuckled: "Where do I get any master-level demeanor? Those are all from Jack Ma of Alibaba and Pony Ma of Tencent. I'm just building cars. Perfect timing, I'll give you one of these cars next year, it'll be just right."

Yan Lirong looked quite serious and turned to ask Liu Jingrong, who was looking at his phone next to her, "Old Liu, don't you think Yu Xing has changed a lot in the past few years?"

Liu Jingrong hummed in agreement with his wife's words.

Yu Xing felt that he hadn't changed much, and spread his hands and smiled at Liu Wanying, "Really? Brother Rong and Master's wife have started to flatter me."

Before Liu Wanying could speak, Liu Jingrong frowned at the inappropriate way of addressing him, but it was fortunate that his two children were not present at the moment, otherwise it would have been even more chaotic if they had called Yu Xing "brother".

"You're into both car and internet technology. You either become a master of one or you go astray," Liu Wanying said with a smile. "You've definitely changed. You're much tougher than when you first started out. It's all thanks to learning from various teachers."

Yu Xing clicked his tongue: "I'm still learning about investing from you, so I should calculate it as a 2.5 adjustment."

Car netting 2.5 repair.

Liu Wanying naturally understood the implied meaning in those words, and after chatting aimlessly for a few minutes, she suddenly received a recent news update on her phone.

She glanced at it twice, and her expression unconsciously turned serious.

Yu Xing noticed the change in Xiao Ying's expression and asked, "What's wrong?"

Liu Wanying hesitated for a moment, and even in front of her brother and sister-in-law, she didn't say it directly, but instead passed the message on: "See for yourself."

Yan Lirong noticed the change in atmosphere and patted her husband: "Where has your daughter gone to play? Go look for her. She's been playing like crazy these past few days and hasn't been doing her homework."

She left the office with her husband.

After exchanging a few words, Yu Xing focused his attention on the news of Ackerman's counterattack.

Allergan had previously filed an emergency application with the SEC requesting a freeze on Pershing Square's trading, but this unusual request has been difficult to fulfill.

After remaining silent for several days, Ackman unexpectedly joined forces with another JV, which already held 3.9% of Company A's shares, to become the largest shareholder.

The term "acting in concert" refers to parties who share the same position and will take joint action in transactions and voting.

In short, Ackman now owns 5% + 3.9% of the stock, making him the largest shareholder of Company A, and is very close to the 10% stake the latter previously claimed under the "poison pill" plan.

In addition to becoming a major shareholder, the star fund manager also stated: "We will continue to acquire shares of A. This action is unrelated to insider trading; it is simply based on our recognition of A's value. At the same time, we hope that the board of directors will remain independent and not be interfered with by CEO David. Otherwise, we have the right to protect the legitimate rights of shareholders."

Ackerman directly named Company A's CEO and even issued a veiled threat.

David was the most active person in leading Allergan to refuse to contact Vania, speaking out through the media several times, resolutely refusing to engage in any acquisition-related contact with Vania—not negotiations, but even the very act of contact.

"Is his so-called concerted action just his own funds?" Yu Xing digested the news and pondered for a moment before saying, "It adds up to 8.9%, and he still wants to continue increasing his holdings. His attitude is very firm."

Liu Wanying agreed with this assessment: "Most likely, this is just a nice-sounding statement, intended to evade the SEC's investigation, or rather..."

She pondered, "Or rather, they're not afraid of the SEC's investigation and just want to make it a done deal. The investigation can take a long time, and by the time the process is over, the acquisition might already be complete."

Ackerman was very bold, and perhaps very energetic, persisting in his operations despite strong opposition.

Yu Xing took a few sips of tea: "Ackerman has crossed the shareholding threshold, and every subsequent increase in his holdings will have to be made public. I don't think his side and Vania's are entirely aligned... Of course, we don't know if he has bought Vania's stock. Based on the information we have now, Ackerman is the most stable party. Whether Vania successfully launches a hostile takeover or Company A finds a suitable white knight, the value of his shares will appreciate."

“Yes, we need to publicly point out his short-term arbitrage strategy in the report,” Liu Wanying said seriously. “I have looked up some similar cases on Wall Street in the past. Even if Company A subsequently takes legal action to sue Ackman, it will most likely be settled, and a huge settlement at that.”

She shook her head: "But even if it's a huge sum, 2 million or 3 million US dollars, it's worth it compared to the scale of this operation and the arbitrage opportunities that exist."

Including JV, the holding company recently revealed, Ackman has apparently used more than $30 billion in funds. If the acquisition is completed, this increase in holdings will be quite substantial.

This way of making money...

First, we need to find a capital-driven company as aggressive as Vania.

Liu Wanying had a sudden realization. She had previously thought that it was Vania who approached Ackerman, but now she thought that it was more likely that the latter and the former hit it off.

Thinking about it this way, he truly deserves to be called a ruthless person who dared to take risks during the financial crisis, and his attitude in the pursuit of profits is very steady.

"With the legal process delayed, is Company A really helpless against Ackerman and his group?" Yu Xing said. "If it can't find a white knight willing to step forward, can it really force a sale?"

Liu Wanying shook her head, finding it difficult to predict the final outcome. Company A has shareholders of all sizes, and their interests may not be aligned.

Guo Shanfeng, who was far away in Lingang, was closely monitoring the pharmaceutical company's capital operations and hostile takeover, actively seeking the best time to intervene. However, while they were patiently observing, the funds had already arrived through different channels.

Since Yu Xing made the decision, Liu Wanying has allocated a budget of $3000 million to short Vania.

As of February 2014, the total short position in the market for Vania Pharmaceuticals was 14.6 million shares, accounting for only 4% of the outstanding shares. Although it was worth $16 billion, it was not excessive compared to its market value of $40 billion. The inflow of $30 million from the mountain peak was also not eye-catching.

Money was truly invested, and the interests were truly intertwined.

Yu Xing and Liu Wanying both hoped that Company A could deliver a strong counterattack.

However, following Ackman becoming the major shareholder, the next company to make a move was Vania Corporation. After its initial attempts to acquire Vania failed, it formally proposed an acquisition plan, hoping to acquire Vania in a combination of cash and stock, with an overall valuation of $456 billion.

The offer of $456 billion represents a 7% premium over Company A's closing price the previous day.

Yu Xing's first reaction upon seeing the offer was: "Ackman can make $2 million like this? That's faster than robbery..." "This is definitely not the final price. $2 million is probably just to cover legal costs," Liu Wanying judged. "They will definitely see Company A's reaction. I suspect that Ackman and his team have already planned to hold an extraordinary shareholders' meeting to remove the board of directors."

As a major shareholder, Ackman would inevitably consider such tactics.

Vania's quote was submitted on the morning of February 6th, Eastern Time.

Company A rejected the offer on the afternoon of February 6th.

In just half a day, David, the CEO of Company A, announced that he would reject the acquisition by Vania Corporation. In addition to reiterating the differences in their values, he also officially announced the launch of the "poison pill plan".

Without negotiations with Ackman, any shareholder has the right to increase their holdings at half price as long as the other party, acting in concert with him, holds more than 10% of the shares.

Vania Corporation is willing to pay a premium because Company A has value, and a 50% discount on such a brand is naturally very tempting. However, there is still a problem... Even if other shareholders buy shares at half price for arbitrage purposes, they may still be willing to sell their shares because of Vania's new offer.

Buying shares at half price was the first arbitrage opportunity, and selling more shares to Vania Corporation was the second arbitrage opportunity.

Based on this possibility, David, who had only recently taken office as CEO, firmly stated that Vania's acquisition offer severely underestimated the company's value, while also making frequent visits to several well-known pharmaceutical companies in the United States, hoping to obtain assistance at this critical juncture.

Vania and Ackerman are coming on strong, so we still need to find the White Knight.

However, finding a Cavalier is not easy, especially when it involves operations on the scale of hundreds of billions of dollars, which makes it even more difficult.

David is British and has extensive connections in the industry, but even with such hasty contact, he still encountered several rounds of polite rejections. After flying around the United States for several days, he had to consider turning his attention to financial giants such as Morgan Stanley.

However, the advice after several private talks was still to find a company within the industry to make the deal.

On February 10, The Wall Street Journal revealed details of the hostile takeover attempt by Vania. It is said that Vania's cash holdings included a $155 billion bridge loan agreement with institutions such as Barclays and Morgan Stanley, of which $12 billion was senior unsecured notes with an interest rate of 5.5% and $35 billion was a revolving credit facility.

Upon seeing the news, David angrily called the Morgan vice president he had met just two days prior, questioning him about the funding provided to Vania.

The Morgan vice president looked quite innocent: "It's just a portion of the funding. If we don't provide it, other institutions will. Besides, you didn't even ask me about this."

David didn't want to say anything more, and after hanging up the phone, another round of agonizing flight began.

Meanwhile, Ackerman continued to exert pressure through public opinion, claiming that David was worried about losing his position and harming shareholder interests, and reiterated his demand that the board maintain its independence and carefully weigh the takeover offer from Vania.

This time, he made a more direct threat: if the board of directors cannot maintain its independence, Pershing Square will consider holding a special meeting to remove the six directors of Company A by soliciting the support of 35% of the shareholders.

David remained unfazed by the threats and refused to negotiate.

Both sides have been making frequent statements, exchanging words back and forth. Many authoritative media outlets have also been involved in this acquisition, providing a lot of detailed information and choosing their stances based on the situation.

With the Spring Festival over, work resumed in Lingang, and everything was renewed.

Both Silicon Carbon Group and Silicon Carbon Data have extremely ambitious goals for this year. However, Secretary Zhang Yangxu noticed that the boss changed his work schedule after the New Year. In the past, he would arrange work in the evenings, but now he has no time to do so.

Yu Xing offered no explanation. The battle was raging on the other side of the ocean, and many of the details that were exposed would help with the content of the mountain peak's appearance. Naturally, he and Xiao Ying needed to consider it carefully. Moreover, as neither side was willing to back down, the intense confrontation made the "beating the grass to scare the snake" effect increasingly exciting.

Before investing money, it seemed like nothing much, but now that I've invested... it's definitely more emotionally exciting.

On February 17, just one week later, Vania made a new round of offers, raising the price from $456 billion to $54 billion.

With such an attractive offer, Pershing Square's Ackerman, as the major shareholder, officially launched a proxy vote, increasing his stake to 9.5% and gathering support from 35% of shareholders to hold a meeting to remove six directors.

A hostile takeover by a deep-pocketed company, followed by an aggressive removal of directors.

Company A had no further options in the face of this situation. David announced through the media that he was formally initiating a lawsuit against Ackerman and Vanilla, hoping to use legal proceedings to slow down their progress.

He also announced that he is in contact with pharmaceutical companies such as Johnson & Johnson and Sanofi in an attempt to bring in competitive offers.

There wasn't much news in China after the Spring Festival. Many financial media outlets noticed a hostile takeover that emerged across the ocean, gave a general report on the situation, but didn't show much interest in following up in depth.

Things changed on February 25th.

On February 25th at 9 PM, major US media outlets published an open letter from renowned short-seller Guo Shanfeng, questioning the company's financial situation, business model, and potential hostile takeover attempts, arguing that Vania's stock price was severely overvalued.

Unlike Guo Shanfeng's past actions, this time it directly and simultaneously sent emails to well-known media outlets. Also unlike its past style of providing concrete evidence, this time it seems more like subjective criticism.

However, since its debut, Guoshanfeng has maintained an undefeated record. This time, it chose the opportunity of a hostile takeover to enter the game, which immediately aroused the interest of the media, public opinion and the secondary market.

David, the CEO of the company that was the target of a hostile takeover, only saw the news when his flight landed.

He was initially in low spirits, having just been refused assistance by Johnson & Johnson, and felt that his options were dwindling and he would have to concede more and more of the company's interests. However, upon seeing the public questioning from the well-known short-seller Guo Shanfeng, his emotions suddenly surged.

"The White Knight didn't come; instead, a dark viper has arrived?"

"Even a poisonous snake will do, bite it, bite it!"

"Are they shorting Vania? Good for them!"

David was so excited that he immediately instructed his secretary, "When the mountain peak comes, take my money and short Vania!"

The secretary exclaimed in surprise: "...Vanlia isn't that easy to short, is it? Guoshanfeng didn't issue a short-selling report."

David was more confident than even the mountain peak itself at that moment: "I believe in the mountain peak! It's the most venomous snake!"

(End of this chapter)