Hong Kong 1980: The Savage Era

Chapter 371 372 [Not Many Good Things Left]

The next afternoon.

The Hong Kong property company also announced that its wholly-owned subsidiary, Mandarin Oriental Hotel, would be spun off and listed, with the funds raised to be used to repay the Hong Kong property company's debts and for its development.

Such conclusive evidence shows that the Landmark Company wants to break up the whole into parts to deal with the secret acquisition by the Chinese company and to discourage the Chinese company from taking this action.

Unfortunately, in the minds of Chinese companies, both Dairy Farm and Mandarin Oriental are just extras, and the real protagonist is the Landmark Group itself.

Hong Kong Land Development is a thorn in the side of Chinese real estate companies. Its 11 commercial buildings in Central are enough to attract attention, with a market value of far more than HK$120 billion.

These assets are the original sin, and the loopholes in mutual control between Hong Kong Land and Jardine Matheson have made Chinese companies salivate over them.

If possible, Luo Qihong would decisively abandon Zhaoan Real Estate Company and take over the Jardine Matheson Company. However, he knew that it was not easy. Without sufficient cash flow and a long period of good market conditions, it would be difficult to persist in the acquisition until it was successful.

Such frequent and strange actions of the Hong Kong Land Development naturally aroused speculation from the outside world, and people suspected that the Hong Kong Land Development was making some big move.

In response to the reporter's questioning, senior management of Swire Properties replied that YICP was preparing for restructuring and that the move was intended to raise funds, and the two companies might be privatized again in the future.

This answer caused a huge uproar. The insightful reporters certainly did not believe it was so simple and asked further whether someone wanted to attack Yili Real Estate and whether Hong Kong Land was forced to respond.
The senior management did not answer this question and ended the interview in embarrassment.

As a result, news about the acquisition of Jardine Matheson Land was flying all over the place. The stocks of the two newly listed companies were not very popular. Instead, the share price of Land Holdings rose by 2%.

The Chinese Alliance Company remained silent and remained very patient, but it did not stop its private stock acquisitions.

This is also one of the reasons why the stock price skyrocketed.

It's June.

Jardine Matheson, Jardine Securities and Hong Kong Land jointly invested to establish "Hong Kong Investors Limited", and merged it with Jardine Securities to form "Jardine Strategic Holdings Limited", with the intention of transforming the mutual control relationship between Jardine Matheson and Hong Kong Land into a mutual control relationship between Jardine Matheson and Jardine Strategic, and having Jardine Strategic directly control the three listed companies Hong Kong Land, Dairy Farm International and Mandarin Oriental.

"This is a very clever move. Jardine Strategy is not a listed company and can effectively block joint acquisitions by Chinese companies." Bai Jinyan exclaimed.

Once the restructuring is completed, Jardine Matheson will hold a 34.6% stake in Jardine Strategic, while Jardine Strategic holds a 55% stake in Jardine Matheson. It will be difficult for it to acquire Jardine Matheson, whose market value is only 30 billion yuan.

But there is still a loophole, that is, Jardine Strategic only holds 26% of the shares of Hutchison Whampoa and can still take action against Hutchison Whampoa.

"Such a big dilemma was solved in one go. You underestimated Simon Keswick." Luo Qihong couldn't help but sigh.

"But there is still a chance for the acquisition of Hong Kong Land Development, as Ximen's predicament has not been completely resolved."

“What should we do? What if Li Jiacheng and his people run out of energy and want to cash out and leave? Jardine Matheson’s holdings in Hutchison Whampoa will inevitably rise to near the bottom line of a full acquisition, and it will be difficult for us to take action again.” Bai Jinyan asked anxiously.

"Then let's make a full acquisition." Luo Qihong sneered. There was no way he could be timid in a takeover war with the Keswick family. Only by letting go could he have a chance of winning.

"Gululu!" Bai Jinyan swallowed his saliva with blood boiling, and asked guiltily, "That requires a cash flow of 2 billion Hong Kong dollars. Where can we get so much money?"

Luo Qihong waved his hand and said, "No need for 2 billion, 150 billion is enough."

"In 72, Hong Kong Land acquired Dairy Farm International by exchanging shares. We can also use this method to save a lot of cash expenditure."

"What if you fail? Do you want to compete with the Keswick family for the board of directors of the Hong Kong Land Company like Pao Yue-kong?" Bai Jinyan asked worriedly.

This is a cash flow of 150 billion yuan, which is even more terrifying than a listed company with a market value of 150 billion yuan.

If any losses occur, all the subsidiaries will be in trouble.

When Pao Yue-kong took over 78% of the shares of Wharf Holdings from Li Ka-shing in 30, he did not take over Wharf Holdings from the beginning. Instead, he demanded two board seats and engaged in open and covert struggles with Bao Fuda and others for more than a year.

Finally, in late 79 and early 80, Pao Yue-kang made up his mind and asked HSBC to borrow HK$20 billion to launch the final battle against Wharf Holdings.

You should know that the market value of the five Chinese real estate giants at that time was only more than 20 billion yuan, and Pao Yue-kong also held 30% of the shares of Hutchison Whampoa. The 20 billion yuan only acquired a little over 20% of the shares.

This shows how determined Pao Yue-Kong was.

"That's not a bad idea." Luo Qihong did not back down at all. Just fight, he won't suffer any loss anyway.

After the words were spoken, the office fell silent.

About half an hour later, Bai Jinyan asked again, "Do we need to cash out all the assets in the Japanese market?"

Luo Qihong drank his tea slowly, put down the cup and said, "Take your time. Li Jiacheng and his men will not start something with a bang but then end it with a whimper. Even I know that there is still some profit to be made from this sale. There is absolutely no chance that they will let it go."

"However, we will start to slowly sell off our investments in the Japanese stock market. As for real estate, we will prepare to cash out non-core assets and only keep the properties and land in the core areas of Tokyo."

"Okay! I will go to Japan to handle this matter myself." Bai Jinyan said.

Unexpectedly, Luo Qihong waved his hand and said, "No need. Just send three senior executives. You also need to keep an eye on the Hong Kong stock market for me."

It's not that he doesn't trust those senior executives, but Bai Jinyan dares to "speak frankly". Sometimes he corrects some of Luo Qihong's misconceptions in thinking. This may seem like a small matter, but in fact, big flaws are caused by small problems.

So Bai Jinyan still needs to stay in Hong Kong.

Hearing this, Bai Jinyan's solemn expression eased a little. After all, this was the approval of her husband, which would be very helpful in consolidating her position in the future.

Tuesday, March 12

Chinese Estates Holdings announced that it would launch a full acquisition of Hsin Chang Construction Company at the current highest share price.

This announcement made the board of directors of Xinchang Construction Company very panicked, as everyone knew the methods of Liu Luanxiong of Chinese Estates Company.

Even if the counter-takeover is successful, Xinchang Construction Company will be skinned alive and will need a long time to recover.

As a result, the largest shareholder of Xinchang Construction Company became frightened. In order to preserve his last rights and interests, he decided to surrender to Liu Luanxiong and sell his shares to Chinese Estates Holdings.

Liu Luanxiong certainly did not want to privatize Xinchang Construction Company, so he boldly bought shares while quietly selling them, waiting for the privatization deadline to arrive.

Soon, Chinese Estates Holdings Group took control of Hsin Chang Construction Company, bringing the number of listed companies under Chinese Estates Holdings Group back to five. The market value of the Chinese Estates Group alone exceeded 50 billion yuan.

In fact, Liu Luanxiong achieved such success a full year faster than in his previous life, and this was inseparable from the support of Luo Qihong.

The afternoon of the second day.

A piece of news caught Luo Qihong off guard and disrupted his plans.

A large number of Landmark Company stocks appeared on the stock market, and the stock price was immediately hit and showed a downward trend. "It should be that the United Company sold Landmark Company stocks. Other companies don't have such a large number of stocks." Bai Jinyan said palely.

Although they made more than 5 million yuan in profits from Jardine Matheson shares, their investment focus was still on Hutchison Whampoa. Now that Hutchison Whampoa's share price has fallen, their losses are even greater.

This news made Luo Qihong feel very embarrassed. He had just said a few days ago that Li Jiacheng and others would not sell the shares of the Hutchison Whampoa Company, but now he had miscalculated.

"A bunch of cowards!" Luo Qihong punched the desk and said gritting his teeth.

The combined strength of the four major families ended up being so anticlimactic, which really wasted everyone's expectations.

"Now we can only continue to hold the shares of the Jardine Matheson Group and wait for the stock price to go back up." Bai Jinyan said in a trembling tone.

"Then let's do this. Don't stop the cashing out operation in Japan. We will acquire the company even if they don't want to." Luo Qihong said in a deep voice.

"Yes!" Bai Jinyan's expression became better. From another perspective, Li Jiacheng and others gave up, the stock price fell, and they entered the market to take over. This was also a good thing.

"Will Jardine Strategy take advantage of the low stock price to buy Hutchison Whampoa shares and increase its equity stake?" Bai Jinyan asked.

Luo Qihong was silent for a moment, and said, "It shouldn't be. Jardine Strategy Company shouldn't have so much funds, and the Keswick family is not very optimistic about the future of Hong Kong, otherwise Simon Keswick would not have said 'Everthink has a price.' (The problem is the price.)"

"With the Chinese United Company's concession, Simon Keswick is likely to be greatly relieved and will continue to remain calm and restructure the Hong Kong Land Company."

"That's better." Bai Jinyan said dejectedly.

Mandarin Oriental Hotel
In mid-December, Luo Qihong heard that Liang Zhonghao, the major shareholder of the Grand Hotel Group, claimed to be disillusioned and intended to leave the Grand Hotel Group and was preparing to sell his 12 million shares of the Grand Hotel.

As the amount is too large, it is unlikely to find a suitable buyer in a short period of time.

Luo Qihong has long been eyeing the shares of the Grand Hotel Group, otherwise he would not have allowed Liu Luanxiong to take action against the Xinchang Construction Company.

Unlike Liu Luanxiong, Luo Qihong hopes to acquire a large hotel group.

The Grand Hotel Group has also expanded in recent years, building hotels in Yanjing, Shanghai, Guangzhou and other places in the mainland, and its assets have further increased.

For Luo Qihong, the acquisition temptation of the Grand Hotel Group is only second to that of the Hutchison Whampoa, but the possibility of a successful acquisition is higher than that of the Hutchison Whampoa.

Luo Qihong and Liang Zhonghao did not know each other, but Zheng Jiachun and Liang Zhonghao were friends, so he asked Zheng Jiachun to act as a matchmaker.

"Isn't Mr. Luo trying to take advantage of the opportunity to acquire the big hotel group?" Liang Zhonghao asked with a slight smile.

Luo Qihong would naturally not admit it, and shook his head and said, "The assets of the hotel are of high quality. I want to make a long-term investment, and I can replace Liang Sheng and control the real estate business of the hotel."

"Mr. Liang should know that I am not very interested in the hotel business, I am only interested in real estate."

"Mr. Luo, it's not that I don't want to sell it to you, but the Kadoorie family and I have an agreement that the person I sell the shares to must be screened and approved by them." Liang Zhonghao was still worried that Luo Qihong had bad intentions.

"A 30% premium! This is the highest price I can offer." Luo Qihong said, "If Mr. Liang is still worried, you can ask the Kadoorie family to come out and have a chat. I am confident that I can convince them."

"Zhonghao, Ah Hong and I are friends. Ah Hong does have a bad reputation in the market, but he never lies to his friends. Since Ah Hong said that he will not launch an acquisition, I believe that Ah Hong will not do this easily." Zheng Jiachun persuaded.

"Of course I trust Luo Sheng, but as for the Kadoorie family, okay, I'll go talk to them. If there's no problem, I'll sell the shares to you, Luo Sheng." Liang Zhonghao changed the subject and said, "But I guess it's unlikely that Luo Sheng will get all the shares, maybe he can get most of them."

"If it's just a majority of the shares, I will still buy it from the stock market until the Kadoorie family is willing to hand over the real estate business to me." Luo Qihong said domineeringly.

He knew that Liang Zhonghao had entrusted his two good friends Yu Jinji and Jian Chongzhi to find buyers for him.

Yu Jinji is a celebrity in the Hong Kong football world. He is familiar with Liu Luanxiong and is very likely to have introduced Liu Luanxiong.

And Lin Baixin's family will also be interested in this equity.

So, after much deliberation, Luo Qihong decided to threaten the Kadoorie family.

Liang Zhonghao was naturally not afraid of Luo Qihong, but he did not want to see the Kadoorie family gain an enemy.

"Mr. Luo is really as domineering as the rumors say. Don't worry, I believe the Kadoorie family will make a choice that is beneficial to them." Liang Zhonghao is quite familiar with the situation of the Kadoorie family and does not think that the Kadoorie family has the strength to fight against Luo Qihong.

Originally there was some, but unfortunately the Kadoorie family has increased its investment in China Light and Power Group in recent years, and the cash inside has long been insufficient, otherwise they would not have allowed Liang Zhonghao to become the largest shareholder of the hotel.

"Okay then. I'll wait for Mr. Liang's good news." Luo Qihong had a faint smile on his face and raised his glass to gesture to Liang Zhonghao.

After leaving the hotel, Luo Qihong and Zheng Jiachun found another place to talk.

"Ah Hong, I really envy you for being able to work on two big projects at the same time." Zheng Jiachun said.

With a 15% premium, the shares of these large hotels would require 8 billion yuan in cash, which is no less than the funds used to acquire the Wing On Group.

If calculated in this way, more than HK$30 billion in cash will be needed.

Adding Luo Qihong's many personal investments, the total amount is hard to calculate, but it must be more than 50 billion yuan.

"They are all bank loans, otherwise where would I get so much cash?" Luo Qihong said with a smile.

Zheng Jiachun glanced at Luo Qihong and said, "I heard that you made hundreds of millions of dollars from your investment in Japanese yen (investment in Bank of East Asia). This is still the public investment. I guess the hidden investment should be multiplied by ten times."

"Is my guess right?"

Luo Qihong smiled and nodded, "Almost. I have sold them all. You have made a lot of money from your joint venture in Japan, right?"

Seeing that Luo Qihong was telling the truth, Zheng Jiachun also told the truth, "Not as good as you. I have a profit of 7 to 8 million yuan, and I haven't sold it yet."

"Do you think there is little room for the yen to appreciate?"

Luo Qihong nodded and said, "There is still a little profit margin. It is better to invest in other projects."

Zheng Jiachun also has his own pride, and of course he would not follow Luo Qihong without permission. Moreover, the stock market in Japan is in good condition, so he is not worried about a collapse at all.

"If it weren't for the lack of funds from New World Development and Wheelock, I would have wanted to acquire shares in the hotel. It's such a pity," said Zheng Jiachun with emotion.

"There are not many good things left in Hong Kong. If Brother Chun wants to achieve something, he must act as soon as possible." Luo Qihong joked.

"Yes, after the acquisition of Wing On Group is completed, I must also study the big companies in Hong Kong carefully. I can't miss this good era in vain." Zheng Jiachun nodded heavily.

(End of this chapter)