Hong Kong 1980: The Savage Era

Chapter 257 258 [Acquisition in Progress]

"Mr. Luo, if Hong Leong Investment Company can help Hang Lung Bank get out of this crisis, I am willing to give it 10% of the shares of Hang Lung Bank as a reward after the success. How about it?" Zhuang Rongkun said with some heartache. Before coming, they had done a relatively detailed investigation and knew that giving up some profits was impossible.

Luo Sheng looked at Guo Lingcan and did not respond to Zhuang Rongkun's proposal.

Guo Lingcan understood and said, "10% of Hang Lung Bank's shares are indeed attractive, but Hang Lung Bank's losses are too severe. If Hong Leong Investment Company enters the market, the risk is too great."

Zhuang Rongkun said, "Mr. Guo, Mr. Luo, although the debt owed by Dali Finance Company is as high as 8 million yuan, it is not all lost. With the good business performance of Hang Lung Bank over the years, this loss can be fully borne. As long as it survives the current bank run and resumes normal operations, it will only take a few years to make up for this loss. Mr. Guo is an insider and should be very clear about this."

Guo Lingcan nodded at Luo Qihong, indicating that he agreed with this point of view.

"There is some truth in what Mr. Zhuang said. If it were only the current debt of 8 million yuan, it would not be a very serious problem for Hang Lung Bank. However, if it were not for the bankruptcy of Dali Financial, Standard Chartered Bank's discovery of this 8 million yuan illegal loan, and the bankruptcy of Xie Liyuan Gold Bank, I think few people would be able to discover the problems of Hang Lung Bank." Luo Qihong said quite forcefully.

Since it is a negotiation, it is natural to use all favorable conditions to suppress the other party. It is because Hang Lung Bank deliberately concealed a large number of loan problems that caused the current problems, and other banks dare not lend a helping hand.

This kind of negotiation would certainly not have a good result, because from the very beginning Guo Lingcan and Luo Qihong did not want to help, and they did not want to merge Hang Lung Bank at this time. After all, that would require more than 1 billion yuan in funds for turnover.

If Guo Lingcan is determined to acquire the company, Luo Qihong will also withdraw his investment from Hong Leong Investment Company. He has no intention of taking such a big risk.

"Mr. Luo, how many bad debts do you think Hang Lung Bank has?" Guo Lingcan did not think that Luo Qihong had not investigated Hang Lung Bank. The negotiation language just now had revealed that Luo Qihong had studied Hang Lung Bank.

"I'm afraid it will take another 8 million yuan. If Mr. Guo wants to acquire Hang Lung Bank, he will need at least 10 billion yuan in cash. Does Hong Leong Investment Company have this money?" Luo Qihong said jokingly.

Guo Lingcan smiled and said, "Hong Leong Investment Company does have this money. To be more precise, Daoheng Bank has this money. But as Luo Sheng said, Hang Lung Bank has lost its credit. How can we invest in it? Unless Hang Lung Bank dares to let us send someone to thoroughly check the accounts, it's a pity that the Zhuang brothers refused."

Luo Qihong shook his head. "Hang Lung Bank will definitely be taken over. The Hong Kong government has always been in the habit of acting as a matchmaker. Instead of spending so much money to rescue Hang Lung Bank, it is better to let the Hong Kong government bear the debt and wait for the sale."

"Haha!! Luo Sheng, great minds think alike! It's a pity that the Zhuang brothers still believe in Hang Lung Bank and still think that Hang Lung Bank is as popular as before. Don't they know that everyone wants Hang Lung Bank to go bankrupt and be taken over." Guo Lingcan laughed heartily and cunningly.

"Then let's continue to wait. After this Hong Kong dollar crisis, Daoheng Bank should be able to gain a firm foothold and become unusually strong. Mr. Guo, let me see if you can use your tricks." Luo Qihong smiled faintly.

Guo Lingcan said, "Luo Sheng, don't worry. If I can't expand and develop Daoheng Bank at such a good opportunity, I should hand over the power."

"Luo Sheng is a tycoon in Hong Kong. I wonder what he thinks of the current Hong Kong stock market?"

Luo Qihong knew that when Guo Lingcan asked about the Hong Kong stock market, he was actually asking him how to buy at the bottom.

"I think it will be over after this Hong Kong dollar crisis, at the latest by the end of the year. Although the impact of the big negotiations is still there, it is not as far-reaching as the Hong Kong dollar crisis, so Dean Securities Investment Company will take action during this period of time." Luo Qihong told some truths.

The Hong Kong market is too big for De'an Securities Investment Company and Hong Leong Investment Company to swallow up. It would be better to do them a favor.

The profits of Hong Leong Investment Company are also beneficial to Luo Qihong. The assets in his hands can be mortgaged in exchange for some loans, and at the same time he can double his money in the stock market.

Tuesday, March 9

The Hong Kong government held an emergency meeting and announced that it would take over the Hang Lung Bank, which was unable to repay its debts. As for how much capital injection would be needed, the public would only be informed of the result after the Hong Kong government had checked the specific debts of Hang Lung Bank.

Some media claimed that Hong Kong government officials revealed that this rescue of Hang Lung Bank would require at least HK$10 billion in cash, or even double that.

Of course, these words are based on facts and are not random.

Inside the spacious private room of the Mandarin Oriental Hotel
Cheng Jianshen contacted six small shareholders of Huaguang Real Estate Company, who held as much as 6% of the shares, which was enough to meet Luo Qihong's acquisition plan for Huaguang Real Estate Company.

"Everyone, let me be frank. I asked you all to come out here because of the shares of Huaguang Real Estate Company in your hands. I plan to purchase the shares in your hands at a premium of 15%. What do you think?" Luo Qihong said directly.

"Is Mr. Luo planning to acquire Huaguang Real Estate Company?" a shareholder asked bluntly, even though Luo Qihong had already made it clear.

Luo Qihong nodded. "Yes, the Zhao family has been busy investing in the shipping industry. They have no hope for the future of Hong Kong, and have no intention of dealing with the development of Huaguang Real Estate Company. So I plan to run it myself."

"How much equity does Luo Sheng have?" asked another shareholder.

"About 21%. If you are not willing to give me your shares, I will spend a lot of money to buy them from the stock market." Luo Qihong said, "I will acquire Huaguang Real Estate Company no matter what."

"Mr. Luo is a great friend of real estate. Isn't a 15% premium a little too little?"

"This is a negotiation, you can propose your own conditions." Luo Qihong looked at the shareholder and said, "3% premium, how about that?" The shareholder didn't care about Luo Qihong's look.

"Okay, then let's do the deal at a 3% premium." Luo Qihong knew that acquisitions required quick decisions. Delaying for one minute would cost a lot more money and involve more risk.

Zhao Congyan is not a two-man army. He is one of the top five shipping tycoons in Hong Kong. If given some time, he can mobilize a lot of funds.

If Zhao Congyan was angered, Luo Qihong would not have an easy time even if he took over Huaguang Real Estate Company, and it would probably be a tragic victory.

Seeing this, the other five shareholders also agreed. They were mostly pessimistic about the prospects of Hong Kong. There were very few who were as strong as Luo Qihong, and most of them had their own businesses and needed some subsidies.

Since October last year, Huaguang Real Estate Company has reduced its actions a lot. Zhao Shizeng has repeatedly wanted to distribute the company's existing funds as dividends, which has disgusted many shareholders.

This is a blatant disregard for the life and death of Huaguang Real Estate Company and the desire to develop the Zhao family's Huaguang Shipping Company, which ignores the interests of most shareholders.

Luo Qihong is willing to pay a 3% premium, which is quite generous. A 3% premium was rare during the heyday of real estate, let alone in today's uncertain and sluggish period.

By acquiring 6% of the shares held by six shareholders, Zhaoan Real Estate Company successfully increased its shareholding to 13.2%. If it continues to acquire shares, it will face the bottom line of a full acquisition.

Citibank Finance

Luo Qihong chatted with Liang Botao for a while and then got down to business.

"Mr. Luo, Zhao'an Real Estate Company already holds 34% of Huaguang Real Estate Company's shares, which is 24% higher than the 10% held by the Zhao Congyan family. However, the Zhao Congyan family has been running Huaguang Real Estate Company for many years and has a high reputation among the directors."

"With only 34% of the shares, it is a bit difficult to obtain the management rights of Huaguang Real Estate Company. The risk is very high. I think this is one of the reasons why the Zhao Congyan family is so confident."

Liang Botao began to analyze and it seemed that he already had a corresponding countermeasure.

"Mr. Liang, just tell me what you have in mind. We have known each other for so long, there is nothing that cannot be said." Luo Qihong laughed.

"Okay, let me get this straight. My first suggestion is that Luo Sheng can contact his allies and ask them to intervene in this acquisition to relieve Luo Sheng's pressure. Your combined shareholding must exceed 50%."

"The second suggestion is that Luo Sheng should spend some time visiting the shareholders and directors of Huaguang Real Estate Company one by one and ask them to support you. This suggestion requires taking risks, and the chances of success will be greatly reduced."

"The third suggestion is that Luo Sheng negotiate with the Zhao Congyan family and return the management rights to the Zhao Congyan family. The reason is that the Zhao Congyan family has invested heavily in the shipping industry. I have analyzed it and think that the Zhao Congyan family will find it difficult to survive the cold winter."

Luo Qihong nodded deeply at Liang Botao's suggestion. After thinking for a while, he felt that Liang Botao's analysis was very accurate. It seemed that there were only these three options at the moment.

"Then which one do you think is the best option, Mr. Liang?" Luo Qihong asked.

"The best option is the first one, which is to contact allies and directly seize the management rights. The second option is to negotiate with the Zhao Congyan family. The third one is..." Liang Botao replied.

"What if I let Dean Investment Company be this ally?" Luo Qihong asked.

Liang Botao's face changed slightly, and he said, "Excuse me for being blunt, but this is likely to be reported by Zhao Congyan as a 'joint acquisition', which will lead to investigations by the Securities and Futures Commission and the Independent Commission Against Corruption, causing some trouble for the acquisition and giving Zhao Congyan's family time to mobilize a large amount of funds."

"Yeah, I understand." Luo Qihong nodded after thinking about it.

"Luo Sheng, this is different from your acquisition of other listed companies. Huaguang Real Estate Company has great potential. If the Zhao Congyan family finds other buyers, it will be extremely disadvantageous to you." Liang Botao advised, "It is better to find a reliable independent ally."

"Then Mr. Liang, can you buy some shares for me in the name of Wan Guo Bao Tong Financial Company? Once I find an ally, will he take over immediately?" Luo Qihong asked hopefully.

"Sure, it's just a small favor." Liang Botao couldn't help but feel relieved when he saw Luo Qihong listened to his advice.

He was also worried that the failure of the acquisition would affect his career, considering that he had never failed since his debut.

"In fact, the financial company can also invest in Huaguang Real Estate Company on behalf of Luo Sheng. Luo Sheng is known as the company's doctor and he attaches great importance to the prospects of Hong Kong. This coincides with the strategy of the financial company." Liang Botao thought about it and decided to lend a helping hand to Luo Qihong and do him a favor. Perhaps he could get a big return in the future.

"Haha!! This is the best. Mr. Liang is really my, Luo Qihong's benefactor." Luo Qihong would naturally not refuse such a good thing, so that he doesn't have to rack his brains to find allies.

Now the issue is Hong Kong’s future. Many people are not optimistic about it, so it is not easy to find an ally who can make such a large investment.

(End of this chapter)