Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 157 Determined to Sell (Seeking monthly tickets, recommendations, and continued reading)

Chen Bingwen decided to meet with Xu Shiwen tomorrow to learn more about Watsons' current financial situation, asset list, store leasing situation, employee structure and potential legal risks.

After all, judging from the situation at the reception, Xu Shiwen's dissatisfaction with the current management of Hutchison Whampoa was palpable, which presented an excellent opportunity for a breakthrough.

At the same time, he also needs to start building a professional M&A team.

Acquiring a company of Watson's scale involves complex asset valuation, equity negotiations, and strategic maneuvering within the group, requiring thorough preparation.

The key issue is that Watsons is not a publicly listed company, its financial data is not publicly available, and the risk of information asymmetry is extremely high.

This was not an acquisition of publicly traded shares on the open market, but rather a private equity negotiation with a long-established British conglomerate like Hutchison Whampoa. Chen Bingwen knew all too well how complicated this involved was.

The biggest risk of acquiring a non-listed company lies in the lack of transparency. Contingent liabilities hidden behind the accounts, undisclosed legal disputes, and unclear related-party transactions could plunge the acquiring party into a bottomless pit at any time.

Therefore, we must neither be taken advantage of nor miss out on a good opportunity.

The balance needs to be struck just right.

Besides that, there's the matter of the Dongguan beverage factory.

In any case, Wang Jianjun and Li Guowei have already fed us, so we must accept this generous gift firmly and digest it as quickly as possible.

Moreover, to show that he takes it seriously, he must personally lead the team.

After all, at this time, attitude is far more important than money.

As for the Tin Shui Wai development and the Lam Sau Fung project, these are not things that can be accomplished in a day or two; they require long-term planning and gradual implementation.

Throughout the journey, Chen Bingwen's thoughts were in turmoil. It wasn't until the car pulled up to the ground floor of Jindu Garden that Zhao Gang, sitting in the passenger seat, gently reminded him, bringing him back from his reverie.

The next day, as soon as Chen Bingwen arrived at his office, he had his secretary invite Fang Wenshan and Gu Yongxian over and told them about the information about Watsons from the party.

After explaining the situation, Chen Bingwen looked at the two men and said seriously, "If we can acquire Watsons, it will be a once-in-a-lifetime opportunity for our Chen's Company."

This would allow Chan Kee to solidify its foothold on Hong Kong Island overnight, establishing a complete supply chain from production to sales.

After speaking, he paused slightly to give Fang Wenshan and Gu Yongxian time to react before continuing, "Watsons' century-old brand value, mature retail network, and ready-made supply chain system are things that we might not be able to build even in five years."

And now, the opportunity is right in front of us.

After a moment of contemplation, Fang Wenshan cautiously asked, "Mr. Chen, acquiring Watsons is indeed a good opportunity, but will Hutchison Whampoa give it up easily?"

I heard that Veri is currently consolidating its assets, could it be...?

“This is our opportunity,” Chen Bingwen said. “Weli is now focused on integrating core assets and divesting and monetizing the non-core businesses that were acquired during the over-expansion period of Qi Dezun.”

Non-core businesses like Watsons are very likely to be prioritized for disposal.

Wei Li's nickname is "corporate doctor" because his specialty is to perform surgery on companies and remove non-performing assets.

In his view, retail businesses like Watsons, which require long-term investment and have slow returns, are likely to be the targets for elimination.

Fang Wenshan seemed to understand something: "So that's why Xu Shiwen is so dissatisfied with the current situation?"

“That’s right.” Chen Bingwen nodded and said with certainty, “What Wei Li wants is to quickly improve the financial statements and please HSBC.”

He has been in the position of tycoon at Hutchison Whampoa for two years. If he cannot turn Hutchison Whampoa around and stop losing money, his position will likely be in jeopardy.

What VeriLoughlin needs most right now is impressive financial statements and cash flow, not the retail business that requires long-term investment.

For him, Watsons was more of a burden than an asset.

We can formulate our acquisition strategy from this perspective.

Gu Yongxian interjected, "But this also means that Wesley will sell Watsons at the highest price and will not easily give in."

“So we have to find the right balance,” Chen Bingwen agreed. “We need to make Wei Li feel like he got a good price, but we also need to make sure we don’t lose out.”

The three of them quickly came up with a strategy for acquiring Watsons.

Chen Bingwen first contacted Xu Shiwen to ascertain whether his willingness to sell was genuine and how much leverage he actually possessed.

Fang Wenshan and Gu Yongxian were responsible for assembling the acquisition team as soon as possible.

After discussing it, Chen Bingwen took out Xu Shiwen's business card and personally dialed the number.

"Manager Xu? I'm Chen Bingwen from Chen's Kitchen." He said very naturally. "We had a very pleasant chat at the party last night. Would you be free to have some morning tea together?"

Xu Shiwen on the other end of the phone seemed a little surprised. After a pause, he readily agreed: "Since Mr. Chen invited me, of course I'm free. May I ask where we'd like to meet?"

"How about the Mandarin Oriental Hotel at 10:00 AM today?"

Chen Bingwen glanced at his watch and said.

"Okay, it's been a while since I've had Man Wah's char siu and shrimp dumplings."

"I'll be there promptly at ten o'clock." Xu Shiwen replied crisply and decisively.

Mandarin Oriental Hotel.

Chen Bingwen deliberately chose a booth by the window, which offered both a view of the Central street scene and a private conversation. He arrived ten minutes early and had just ordered a pot of aged Pu'er tea when Xu Shiwen appeared at his seat right on time.

"Mr. Chen, I'm sorry to have kept you waiting."

Xu Shiwen still looked slightly tired, but compared to last night's cocktail party, he had less of the social niceties and more of a pragmatic look.

"Manager Xu, you're too kind. I just arrived too. Please have a seat."

Chen Bingwen smiled and poured him some tea. "The shrimp dumplings and char siu here are truly exceptional. I've already ordered a few dishes. Let's see if they suit your taste."

“Chen Sheng is a straightforward person, so I won’t beat around the bush either.”

Xu Shiwen took a sip of tea and got straight to the point, "There were too many people and too much chatter last night, so it was inconvenient to discuss many things in detail."

You asked me out today, so you must be interested in Watsons, right?

Chen Bingwen calmly poured him some tea: "Manager Xu is a straightforward person, so I'll be frank with him too."

Chen's is indeed very interested in Watsons, but the key question is whether it's worth acquiring.

Xu Shiwen took a deep breath and continued, "Since Mr. Chen is so sincere, I won't hide it from you."

I own 18% of Watsons' shares, which gives me influence over several other shareholders.

The director of Vantone, Liu Zhitang, whom you met yesterday, holds 3.5% of the shares.

If you really want to acquire it, you can get at least 36% of the shares.

Veri is eager to cash out; this is an opportunity.

Xu Shiwen was probably determined to sell his Watsons shares, and he revealed all his shareholding details at once.

Chen Bingwen was deeply shocked; Xu Shiwen's frankness and decisiveness far exceeded his expectations.

This is practically handing him the keys to acquiring Watsons!
With 18% plus Liu Zhitang's 3.5%, these two alone hold 21.5% of the shares, which is a decisive force capable of shaking the balance of any negotiation.

Faced with Xu Shiwen's direct honesty, any probing or reservations would be superfluous.

Chen Bingwen looked at Xu Shiwen and said bluntly:
"Manager Xu, since you are so frank, I will no longer hide anything from you."

Chen Ji does have the idea of ​​acquiring Watsons, but our goal is by no means limited to a partial stake or joint operation.

For the sake of future strategic unity and efficient development, we need a full acquisition, 100% equity!
Only by fully integrating Watsons into the Chen Kee system can it completely break free from past constraints, inject new vitality, and truly be reborn, instead of continuing to languish in the tug-of-war of conflicting interests.

Hearing Chen Bingwen's words, Xu Shiwen was not disappointed at all; on the contrary, he felt a sense of relief.
"Good! Mr. Chen, that's bold! That's for the best! Only a full acquisition can break the deadlock completely."

Fragmented investments and alliances will only lead to repeating past mistakes and endless internal strife!
Watsons' current predicament is inextricably linked to its dispersed shareholding, inefficient decision-making, and lack of long-term strategic planning.

However, for Mr. Chen, the most crucial hurdle lies with the board of directors of Hutchison Whampoa.

Wylie needs authorization from the board of directors, especially the voting rights of the HSBC representative.

Those foreign directors valued the numbers, the risks, and HSBC's attitude.

He looked directly at Chen Bingwen and said, "I can help you with your work."

Having worked at Hutchison Whampoa for many years, I have influence with several key figures on the board. I can at least help create an opportunity for you to present a fair account, rather than letting Wylie's one-sided story dominate the agenda.

However, I have one condition.

Xu Shiwen paused and continued, "After you acquire it, you must sincerely develop and expand Watsons, instead of treating it as a dispensable bargaining chip like it is now."

What I want is for Watsons to have a truly promising future!
"If you can do this, I, Xu Shiwen, along with everyone I can influence, will do everything in my power to help you make it happen!"

“No problem! Manager Xu, this is exactly what I want to see!” Chen Bingwen said sincerely, “The acquisition is only the first step; the real challenge is to revitalize Watsons.”

No one knows Watsons better than you.

If you are willing, the position of General Manager of Watsons will be yours after the acquisition is completed!

You will have full operational decision-making authority, and Chen Ji will provide full support behind the scenes, including funding, resources, and complete trust!

“No problem! That’s exactly what I’ve been hoping for!” Xu Shiwen said excitedly. “Mr. Chen, to be honest, I have a very special feeling for Watsons.”

It is not just an industry, but also a place that embodies the hard work of several generations of my family.

For me, witnessing and participating in its revival firsthand would be far more meaningful than simply cashing out and leaving.

Since Mr. Chen is so sincere, let's talk about the specifics of how to proceed.

I'll handle things with Wei Li.

I have connections on the board, which can at least ensure that your acquisition proposal is seriously discussed, rather than being rejected outright.

While HSBC's stance is crucial, it's not monolithic. As long as the proposal demonstrates sufficient cash return and risk control, communication with Sir Michael Sandberg is not impossible.

(End of this chapter)