In Hong Kong, we build a global business empire

Chapter 181 Jardine Matheson becomes HK Electric's competitor again

Hearing that there was something important to report, Lin Haoran immediately perked up.

"What's the matter? Can you tell me in detail?" He pulled out a chair in front of the desk, sat down, and asked curiously.

“A few years ago, our Hong Kong Electric Group and Jardine Matheson had planned to cooperate in acquiring another long-established public utility listed company, China Gas Company, by secretly absorbing a portion of its shares and hoping to fully acquire it in the form of cash and stocks.

However, it was strongly opposed by the China Gas Board of Directors at that time. In addition, the board of directors held most of the controlling rights. Even if Jardine Matheson and Hong Kong Electric Group had more funds, they could not acquire the company without the consent of the China Gas Board of Directors. Ultimately, the full acquisition was not achieved. This matter caused a lot of controversy at the time, but for this reason we also hold some China Gas shares acquired from the secondary market, accounting for about 7.2% of the total shares of China Gas, and these shares have never been sold.

Just this afternoon, Mr. Niu Bijian, the boss of Jardine Matheson, called me and hoped that we could sell this part of the shares of China Gas Company to them. They plan to launch a fierce attack on China Gas Company. I need to know your opinion on this matter.

Like us, Towngas has stable income. Moreover, since Towngas is a monopoly public utility listed company in Hong Kong, the entire Hong Kong market is supplied by them. We have held shares for a few years, and they basically pay dividends every other year or once a year. In five years, they have received dividends of nearly 10 million Hong Kong dollars.

Therefore, I do not recommend selling the shares to Jardine Matheson. I think this investment is more cost-effective than most investments. It is a high-quality investment project with no possibility of loss. Even if they buy it at a premium, I still recommend not selling it. Instead, continuing to cooperate in the acquisition may be a good approach. "Chen Shoulin reported it in detail.

Companies like Towngas have not taken the path of diversified development like the Hong Kong Electric Group, nor have they expanded their markets overseas. Although it is difficult for them to have much room for value-added and the market has basically become fixed, their revenue is very stable. Even after decades, the company will still exist and its profits will still be very substantial.

"The Hong Kong Electric Group actually owns shares in China Gas Company and once planned to acquire China Gas Company?" Lin Haoran was very surprised.

He really didn't know about this.

The acquisition battles for British companies such as Hong Kong Electric Group, Wharf Holdings, Hutchison Whampoa, and Wheelock Holdings were all very classic because they involved bigwigs such as Li Ka-shing and Pao Yu-kong. Even Lin Haoran had a general understanding of these things.

However, the popularity of China Gas Company is obviously much lower than that of these British banks, so it is normal that Lin Haoran doesn’t know much about it.

In addition, Lin Haoran has only been in charge of the Hong Kong Electric Group for too short a time, and he does not come here often. Although he has tried hard to understand the situation of the Hong Kong Electric Group, there is still a lot of information that he has not had time to read.

He looked at some of the most important information, such as how much money was left in the group and how much profit the group made every month. These were what he wanted to know most.

He didn't expect, he really didn't expect that the Hong Kong Electric Group would give him another unexpected surprise.

After all, he is now secretly acquiring shares of China Gas Company with the intention of acquiring this high-quality listed utility company in the future.

7.2% of the shares is already a lot.

The acquisition between Hong Kong Electric Group and Jardine Matheson took place in 1975. Lin Haoran had not yet traveled through time at that time, and his original body was still studying in the UK. Naturally, he had no impression of this incident.

After the Hong Kong Electric Group and Jardine Matheson's acquisition of China Gas Company ultimately failed, the Hong Kong Electric Group even retaliated against China Gas Company.

They are giving away electric water heaters to some new settlements, which can not only increase residents' electricity consumption, but also retaliate against China Gas by reducing residents' gas consumption.

These instant electric water heaters have a power of up to 8 kilowatts and consume 18 degrees of electricity per hour. Although they seem to be given away for free, the Hong Kong Electric Group does not lose anything. In addition, a deposit is required, so it is true that the wool comes from the sheep.

Facts have proved that this strategy of HK Electric Group was very astute. It not only retaliated against China Gas Company, but also increased the revenue of HK Electric Group significantly.

Of course, this retaliation obviously did not cause much loss to China Gas Company.

It is worth mentioning that the reason why the board of directors of China Gas Company refused to acquire them in the form of cash or shares and did not give any room for negotiation to the two British giants, Jardine Matheson and Hong Kong Electric Group, was because China Gas Company was a Chinese-owned enterprise controlled by a Chinese consortium. These Chinese directors were also very stubborn and were unwilling to be acquired by Hong Kong Electric Group and Jardine Matheson, which were British-owned companies.

And now, Jardine Matheson has not given up the idea of ​​acquisition, but has once again set its sights on China Gas Company. Even Chen Shoulin did not expect this.

"Boss, it's like this. Although we failed to acquire the company because the board of directors of China Gas held too much equity, times have changed. After five or six years, the equity structure of China Gas has changed, and the board of directors does not hold as much equity as before.
It is precisely because of this that Niu Bijian felt that he had seen another opportunity to acquire China Gas Company, so he put his mind to us. If we were to acquire the 7.2% stake we hold, it would obviously be a great help to Jardine Matheson. "Chen Shoulin continued to explain.

Lin Haoran nodded. Through Chen Shoulin's explanation, he gradually understood the history and current situation.

"We can't agree to their request, Mr. Chen. To be honest, I also have my eyes on China Gas Company. I have a general understanding of the company's situation. It is indeed a very high-quality listed company, but they are not very ambitious, so they don't have much desire to expand the market and diversify their development. This is why their income is mainly from selling gas. Do you think we can succeed in acquiring it ourselves?" Lin Haoran asked with a smile. China Gas Company had long been labeled by Lin Haoran as a must-acquire company. Jardine Matheson wanted to acquire it first, so Lin Haoran naturally would not agree.

"Boss, our company currently has sufficient funds. In addition to a portion of funds that need to be used to cooperate with the Hong Kong Land Group to develop the North Point project, there is also a lot of funds that can be mobilized. Under normal circumstances, if Jardine Matheson did not intervene, we would indeed be able to acquire the China Gas Company. However, according to the current situation, it is somewhat difficult because we don't know how many shares of the China Gas Company are controlled by Jardine Matheson, and we may not be able to compete with the China Gas Company.

The strength of Jardine Matheson is much higher than that of Hong Kong Electric Group. Most of the British financial groups behind it are famous British aristocratic families. Although I don’t know how many shares of China Gas Company Jardine Matheson holds now, it is definitely more than what we hold. It is very likely to be more than 10%. Moreover, from some information he and I have on the phone, it can be seen that they have planned to continue to secretly acquire shares from the secondary market in an attempt to control this Chinese listed company. "Chen Shoulin shook his head and said.

"Then tell me, if we want to acquire China Gas Company, how can we compete with Jardine Matheson?" Lin Haoran asked.

"Boss, the best way is to get the support of the board of directors of China Gas Company. In the past two years, when the stock price rose sharply, some Chinese shareholders of China Gas Company sold their shares, so the proportion of Chinese equity is not as high as in previous years. Jardine Matheson is planning to take advantage of the opportunity.

Assuming that they hold more than ten points of China Gas Company's shares and successfully acquire our 7.2% shares, their shares in China Gas Company will reach more than 20%. If they continue to acquire large numbers of shares through the secondary market, at that time, even if the board of directors of China Gas Company wants to maintain controlling rights, it may not be able to do so.

In the face of absolute strength, if your controlling rights are not stable enough, you are at risk of being acquired at any time. ” Chen Shoulin replied.

Lin Haoran nodded. Chen Shoulin’s method might be the best way for him to acquire China Gas Company.

This is also the reason why Lin Haoran wants to control the shares of Hong Kong Electric Group to 49.9%, because this way he can rest assured that other people who want to take over Hong Kong Electric Group will not be able to snatch his controlling rights even if they have more money.

Judging from Universal Investments' acquisition of China Gas Company's shares, Jardine Matheson does not seem to have launched an attack on the stock market yet. Instead, it plans to first negotiate for the 7.2% stake in Hong Kong Electric Company and then use its strong financial strength to seize the controlling stake in China Gas Company in one fell swoop.

The reason why Jardine Matheson asked to purchase shares from Hong Kong Electric Group at this time was because Jardine Matheson felt that they were now in a honeymoon period with Hong Kong Electric Group. The recent agreement that Hong Kong Land would jointly develop the former site of the Electric Road Power Station in North Point with Hong Kong Electric Group in the form of equity made Niu Bijian believe that there was a high probability that Hong Kong Electric Group would agree.

However, this time, Niu Bijian thought too much.

Even if there is cooperation, so what? Every company has its own independent development plan, and we will definitely not give them face by giving up the project just because we have cooperated with them.

"Are you familiar with the boss of China Gas Company?" Lin Haoran suddenly asked.

"Boss, I know both the chairman of China Gas, Li Mingze, and the important director, Li Guobao. In 1975, I also relied on my Chinese identity to deal with them many times. At that time, I was not the chairman of the Hong Kong Electric Group, but the general manager.

However, they believed that although I was the general manager of the Hong Kong Electric Group and had certain say in the group, I was just a senior manager without any equity, that is, a professional manager. The Hong Kong Electric Group was ultimately a British-owned company, so they refused.

Although I tried hard to impress them, I failed every time. So the acquisition battle in 1975 ended in failure! "Chen Shoulin seemed to recall the negotiation experience several years ago and was still upset about the failure of that negotiation.

"To be honest, it's a good thing that you didn't make the deal that time, otherwise, China Gas Company would be controlled by Jardine Matheson now." Lin Haoran said with a smile.

Although the acquisition was jointly made by Hong Kong Electric Group and Jardine Matheson, it is obvious that Jardine Matheson will ultimately be the dominant player. It is difficult for Hong Kong Electric Group to compete with Jardine Matheson for the final say. Jardine Matheson was definitely at its peak five years ago. At that time, Jardine Matheson owned Hong Kong Land Development and Wharf Holdings, and their combined market value might not even be comparable to that of HSBC.

Although the strength of Jardine Matheson has been greatly reduced due to the loss of Wharf Group, as the saying goes, a lean camel is bigger than a horse, and its strength is still far stronger than that of Hong Kong Electric Group. The gap between top companies is also very large.

"Boss, then I will reply to Mr. Niu Bijian and reject them directly. Tell them that our Hong Kong Electric Group also plans to acquire China Gas Company!" said Chen Shoulin.

"Well, that's enough of a reply. As for the acquisition of China Gas Company, we will discuss it in detail on how to acquire China Gas Company." Lin Haoran nodded.

When he learned that Hong Kong Electric Group owned 7.2% of China Gas Company's shares, Lin Haoran suddenly changed his mind. He planned to acquire China Gas Company in the name of Hong Kong Electric Group.

As for Universal Investment Company, it can continue to acquire shares on the stock market and assist Hong Kong Electric Group in taking over China Gas Company at any time.

Brothers, please give me monthly tickets.

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(End of this chapter)