A century-old wealthy family that rose from Shanghai

Los Angeles.

In the conference room at Amazon Commercial Realty headquarters, sunlight streamed through the floor-to-ceiling windows onto the mahogany table, making the "Sheraton Hotel Equity Structure Report" stand out clearly.

Chen Wenjin sat in the main seat, his fingertips tracing the words "Henderson family holds 32% of shares" on the report, his gaze sweeping over Andrew, president of Amazon Realty, Cole, president of hotel management, and Sarah, chief financial officer.

His tone was one of unwavering certainty: "With the passing of Mr. Ernest Henderson, his family lacks a strong successor, which is the perfect opportunity for us to enter the market. We don't need to pursue a 51% controlling stake; as long as we acquire the Henderson family's shares and become the largest shareholder, we can dictate the direction of Sheraton's development. You must understand, this is a long-established company that has been rooted in the hotel industry since 1937. Starting from the first converted apartment hotel in Springfield, Massachusetts, it has grown into a chain of hundreds of hotels spanning North America and Europe. Its heritage is far beyond that of ordinary hotels."

Andrew nodded immediately, adjusted his gold-rimmed glasses, and spoke with confidence in his past achievements: "You're right. Besides, the Los Angeles Times just published a feature article about us last week—from the opening of San Francisco's first 'Automobile-themed shopping mall' in 1960 to now having seven shopping malls covering major North American cities, with occupancy rates consistently above 96%, and brands like Macy's and Tiffany actively following suit to move in. The media calls us 'a force that is changing the landscape of American commercial real estate.' With such a reputation, coupled with our respect for Sheraton's history—such as Mr. Henderson's business philosophy that 'every dollar invested should increase the hotel's value by two dollars'—the Henderson family has no reason not to believe in our capabilities."

As he spoke, he pushed a newspaper in front of Chen Wenjin. The headline on the front page was particularly eye-catching: "Allen and His Amazon Business Empire." The article detailed Chen Wenjin's journey from taking over a small investment from his family to building a top commercial real estate brand in North America. It also specifically mentioned that "he is the first Chinese entrepreneur to own seven mega-mall shopping malls in the United States."

Chen Wenjin glanced at the report, then picked up a yellowed copy of "The History of Sheraton" on the table and turned to the page from 1939. When Henderson and his partner Moore acquired a hotel in Boston, the cost of replacing the giant illuminated "Sheraton" sign on the roof was too high, so they simply unified the name of all their hotels. This accidental decision led to the hotel's legendary future.

"I've already figured out the source of funding."

Chen Wenjin opened the financial statements and explained clearly, “I will inject $80 million into the company. This part is our own funds, enough to cover about 60% of the acquisition cost. Second, under the guise of ‘acquiring Sheraton and inheriting a century-old hotel brand,’ we will apply for a combined loan from Chase Bank—using the shares acquired in Sheraton as collateral, with future dividends as a guarantee for repayment. We will strive to secure the remaining US dollar loan at an interest rate 10% lower than the benchmark rate for the same period. You should know that Sheraton went public on the NYSE in 1947 and was one of the first listed companies in the hotel industry. With such brand reputation, the bank has no reason to refuse.”

Sarah immediately added, "I have had preliminary discussions with Chase Bank. They have a high level of brand recognition for Sheraton and great trust in our Amazon Group. They are willing to act as the lending bank and provide guidance for the acquisition."

The classic marketing case of Sheraton in 1965, where "tense executives relax at Sheraton," is still memorable. The image of the businessman carrying a huge wind-up key and finding relaxation at Sheraton remains a textbook example of hotel marketing.

Good assets naturally don't have to worry about bank loans, especially since Amazon itself has considerable strength.

After the meeting, Andrew and Cole immediately flew to Boston with their team.

Ernest Henderson Jr., the heir to the Henderson family business, is a middle-aged man in his early forties. Faced with the vast business empire left by his father, he has long been considering retiring due to his "lack of understanding of hotel management".

His office bookshelves are filled with his father's belongings: a photo of the signing of the contract for the acquisition of the Copley Square Hotel in Boston in 1941, a map of Sheraton's expansion along the East Coast in the 1950s, and a book full of annotations, "The Way of the Hotel"—a summary of Mr. Henderson's life experience, in which the concept of "never bleeding someone dry" remains the core of Sheraton's corporate culture.

When Andrew, representing the Amazon Group, proposed to acquire 32% of the shares at $13.5 per share while retaining a seat on the board of directors, Henderson Jr. was tempted but still hesitated. He was worried that the family would lose all ties with Sheraton and even more afraid of failing his father’s wish to “build Sheraton into a “warm business hotel”.

Just as the two sides were about to reach a preliminary agreement, a report from the Wall Street Journal came as a bombshell: ITT Group was interested in acquiring Sheraton at $14.18 per share, a 5% premium over the market price.

In an office building in Los Angeles, Chen Wenjin looked at the newspaper, his eyes suddenly becoming serious.

He knew all too well the ins and outs of ITT and Harold Ginning—this company, which started as a water pump manufacturer, had long since become a "merger and acquisition machine" under Ginning's leadership: from the 1960s to the present, ITT had acquired nearly a hundred companies at an average rate of one every two weeks, expanding its business from telecommunications to food, insurance, and hotels, with a market value exceeding $2 billion. Ginning was also known for his "iron-fisted integration" approach, having laid off 30% of the staff within three months of acquiring a food company, and even declaring that "companies don't need emotions, they only need profits."

"To allow such a person to control Sheraton is a desecration of Mr. Henderson's life's work."

Chen Wenjin tapped his fingers on the table, his gaze sharp. “We won’t compete with him on blind premiums. We want all shareholders to see ‘long-term value’—Sheraton is not ITT’s ‘cash flow tool,’ but a brand that carries nearly thirty years of hotel culture. Andrew, Cole, you immediately contact The New York Times and The Boston Globe and release our core argument: ITT is an industrial group, and its understanding of the hotel industry is limited to ‘collecting rent,’ while we have the global naming rights to The Ritz-Carlton, understand high-end service, and know even better how to inherit Sheraton’s ‘service-first’ DNA.”

Andrew acted immediately.

The following day, The Boston Globe published an interview with Amazon Business, in which Amazon Hotel Management CEO Cole specifically mentioned Sheraton's history: "From the first room at the Stonehaven Hotel in 1937 to its current scale of hundreds of hotels worldwide, Sheraton didn't rely on blind expansion, but on 'making business travelers feel at home'—for example, Mr. Henderson's requirements that 'room lighting should be suitable for reading without being glaring' and 'front desk response time should not exceed 30 seconds.' These details are completely beyond ITT's comprehension. After acquiring the Boston Ritz-Carlton last year, we increased our room occupancy rate from 80% to 95% in just one year, thanks to our control over these kinds of service details. If we were to acquire Sheraton and retain its 'business first choice' positioning, allowing the brand image of 'Sheraton = reliability' to continue, this is something ITT could never do."

at the same time.
The New York Times also unearthed ITT's "dark history"—three years ago, after acquiring a hotel chain, it closed 12 stores in just one year due to a lack of operational expertise, and faced customer complaints about declining service quality, ultimately having to sell it at a low price. In contrast, Sheraton's nearly 30-year record of "zero large-scale store closures" and "over 60% repeat purchase rate from existing customers," as well as Amazon Shopping Center's "ten years of zero store closures" and "100% brand renewal rate," appear more reliable.

Public opinion quickly turned in favor of Amazon, and many long-time Sheraton shareholders wrote to Sheraton headquarters: "We hold Sheraton stock because we believe in Mr. Henderson's philosophy, not for the ITT premium."

But Harold Ginning wasn't about to give up easily. He flew to Boston himself and, in front of the Henderson family, confidently promised: "ITT will invest $5000 million to help Sheraton expand into the European market and will also integrate Sheraton's membership system with ITT's travel agencies, adding at least 100 million new customers every year."

He even presented an "integration plan," boasting that he would expand Sheraton's franchised stores from 60 to 100 within a year, "making Sheraton the world's largest hotel chain brand."

When Henderson Jr. asked how to maintain the service standards left by his father, Ginning gave a vague answer: "Once the scale increases, the profits will naturally follow. Service details can be improved later."

Henderson Jr. hesitated again. Upon learning this, Chen Wenjin flew to Boston overnight to meet with him directly. He didn't offer any grand promises, but simply took two things from his briefcase: a well-worn copy of *The History of the Sheraton* and a service manual from the Ritz-Carlton Boston. "Look here," he said.

Chen Wenjin turned to the chapter about the merger of Sheraton and the American Real Estate Improvement Company in 1946. "When your father merged with her, he specifically included a clause in the agreement to 'retain the original management team' in order to prevent the brand culture from being disrupted. And our Ritz-Carlton service manual has the words 'Serve gentlemen and ladies with the attitude of gentlemen and ladies' on the title page, which coincides with your father's philosophy of 'service first'."

He paused, then spoke earnestly: "Amazon is willing to offer $14.58 per share, an 8% premium over the market price. More importantly, we are considering acquiring only 25% of your family's equity, retaining 7% ourselves; inviting you to serve as Chairman of the Board of Directors of 'Amazon Hotels Group'; retaining all of Sheraton's existing management team; and even establishing the 'Henderson Brand Heritage Committee' to specifically maintain Sheraton's history and culture—for example, preserving the iconic decorations of each old hotel and continuing the core marketing message of 'relaxing tense executives.' What we want is 'mutual development,' not 'complete control,' and we certainly won't let Sheraton become a soulless 'chain machine.'"

Looking at his father's signature on "The History of Sheraton," and then at the determination in Chen Wenjin's eyes, Henderson's mind completely shifted.

He knew all too well what Grinning's "expansion plan" meant—it would cause Sheraton to lose the brand soul it had built up over nearly thirty years, turning it into ITT's "money-making tool."

That evening, he convened a meeting with his family members, placed his father's annotated notebook and Amazon's proposal on the table, and said excitedly, "Amazon understands the hotel industry, and even more so, they understand my father's last wishes! They know that the value of Sheraton is not the number of stores, but the details that guests remember—the smile at the front desk, the lighting in the guest rooms, and the unchanging service commitment over the years! With them, Sheraton can go further!"

Ultimately, the Henderson family unanimously approved the partnership with Amazon.

After dealing with the largest shareholder, Chen Wenjin rushed to New York to visit Sheraton's second-largest shareholder, JPMorgan Chase Fund (which holds 8% of the shares).

When fund manager Mark Wilson met him, his tone was somewhat subtle: "Ginning just came yesterday and promised to mortgage some of Sheraton's assets to us in exchange for lower loan interest rates after the acquisition. To be honest, this is very attractive to our short-term returns."

Chen Wenjin was prepared; he handed over a cooperation agreement.

“Mark, short-term interest income is just a ‘small benefit’; long-term cooperation is the ‘big benefit’.”

Chen Wenjin continued calmly, “You should know that when Sheraton went public in 1947, JPMorgan Chase was one of its lead underwriters. You witnessed its growth from dozens of stores to a chain of hundreds. Now, we can not only help Sheraton continue to grow, but also take it into the Asian market—my family has vast real estate resources in Hong Kong and Singapore. The Sheraton that will open next to Victoria Harbour in the future will not only continue the brand’s history, but also attract global tourists. You understand the business opportunities behind this better than I do.”

Later, Chen Wenjin's father-in-law, Carson, even called JPMorgan Chase personally, and shortly afterward, Mark Wilson received a call.

Mark Wilson, recalling JPMorgan Chase's history with Sheraton, immediately made a decision. "JPMorgan Chase is willing to support Amazon."

He immediately made the decision, saying, "We will not only vote in favor at the shareholders' meeting, but also help you lobby other small and medium-sized shareholders, and even restrict ITT's acquisition channels—we will refuse to facilitate any large-scale share acquisitions they want on the grounds that 'shareholders are not transferring their shares for the time being.' We believe that only operators who understand the brand and respect history can truly unleash the value of Sheraton."

Harold Ginning was enraged upon learning the news. He held an emergency press conference at ITT headquarters, roaring into the cameras: "I will publicly acquire Sheraton stock at $15 per share and take control!"

At this time, Amazon already held 25% of the Henderson family's shares, 8% of JPMorgan Chase's shares, and 5% of the shares acquired from the market, bringing its total shareholding to 38%, making it the largest shareholder.

Even more fatally, public opinion had already turned against the company—The Wall Street Journal published a commentary with a headline that went straight to the heart of the matter: "Gilling's premium acquisition is like buying an antique with gold bars but not knowing how to maintain it; Amazon's approach is the right way to increase the value of an antique—he understands Sheraton's history, its soul, and how to make this nearly 30-year-old brand continue to shine in the new era."

Many small and medium-sized shareholders preferred to hold their shares and wait and see rather than sell to ITT. Jining's "public takeover" ultimately turned into a farce, and after acquiring only 2% of the scattered shares, it had to announce its abandonment.

At the Sheraton shareholders' meeting a week later, the voting results were announced: Amazon was elected as the largest shareholder with a 30% stake, Henderson Jr. was appointed as chairman of the board as scheduled, and Cole, head of Amazon's hotel business, was appointed as an executive director.

When the meeting ended and Chen Wenjin and Henderson Jr. jointly unveiled the plaque for the "Henderson Brand Heritage Committee," a long and enthusiastic applause erupted from the audience—many longtime shareholders had tears in their eyes, knowing that Sheraton's history had finally not been severed in the frenzy of capital.

The ITT representative sat in the audience, his face ashen, but could only watch helplessly as this acquisition battle, which lasted for nearly a month, ultimately triumphed over "blind capital" with "knowledgeable sincerity" and "respect for history".

Of course, Amazon's prices are not lower than ITT's.

Because of the involvement of the ITT Group, the acquisition cost tens of millions of US dollars more.

Of course, it was all worth it.

Chen Wenjin quickly received his father's support and encouragement. He immediately felt that everything he had done recently had finally achieved its greatest success—his father's recognition!

Real estate and the hotel industry formed the foundation of his development as the eldest son of the second wife. According to his father, a family must have a business capable of generating 'hegemony'—and 'real estate hegemony' is also a form of hegemony. (End of Chapter)