Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 185 United Front Work (Seeking monthly votes, recommendations, and subscriptions!)
"That's exactly what I meant," Chen Bingwen said with a smile.

Just then, Secretary Ali knocked on the door and came in.

"Mr. Chen, the board secretary of Qingzhou Yingni called and formally replied to our letter proposing to convene an extraordinary general meeting of shareholders."

The reply letter just arrived by fax.

"Huh? What did you mean?"

Chen Bingwen asked.

"The board of directors of Qingzhou Yingni has approved our request."

An extraordinary general meeting of shareholders is scheduled to be held at 10:00 a.m. next Tuesday in the conference room of Qingzhou Yingni Company to consider the proposal to add directors.

The other party stated that Mr. Li of Cheung Kong Holdings welcomed the move and looked forward to discussing the company's development plans with the new shareholder representatives.

Ali reported.

Sure enough, it came.

Li Jiacheng's reaction was almost exactly as Chen Bingwen had predicted.

They readily agreed, putting on a grand show, but they definitely dragged it out until the very last minute.

"Okay, I understand. Reply to the other party that we will attend on time."

Chen Bingwen gave the instructions.

Then, he looked at Vincent Fang and Ling Peiyi and said seriously, "Next, we'll see at the meeting next Tuesday whether they are genuinely cooperating or hiding their true intentions."

Fang Wenshan sneered: "I'm afraid the latter is more likely. We need to be fully prepared."

Ling Peiyi nodded: "I will expedite the preparation of the technology upgrade proposal as our first proactive proposal to gauge their reaction."

"Okay." Chen Bingwen stood up. "You all go and prepare."

Remember, once you join the board of directors, observe more, listen more, and express your opinions less.

But when it's time to fight, we won't give an inch.

"Understood," the two replied in unison, and got up to leave the office.

After Fang Wenshan and Ling Peiyi left, Chen Bingwen did not stay in the office.

He got up and went out, heading straight to the room next door that was specifically prepared for the investment department's traders.

The room was filled with the sounds of telephones, calculators clicking, and whispered instructions.

The air was filled with the aroma of coffee and tobacco.

Several huge blackboards hung on the wall, covered with various stock codes and price charts.

Several traders kept their eyes glued to the numbers on the blackboard and the constantly updated quotes.

Xie Jianming, the head of the investment department, had dealt with Chen Bingwen before when they acquired Thai Golden Elephant Foods. Upon seeing Chen Bingwen enter, he immediately stood up to greet him.

"Chen Sheng," Xie Jianming greeted him in a low voice.

"Well, how's the situation?" Chen Bingwen walked up to a blackboard specifically marked "Qingzhou Yingni" and asked Xie Jianming.

Xie Jianming picked up a newly printed transaction record and reported, "Mr. Chen, these past few days we have been following our plan to continuously acquire scattered shares of Qingzhou Yingni in the market."

So far, progress has been relatively smooth, with another 2.3% acquired.

He pointed to the data on the blackboard: "Our total shareholding has reached 23.8%."

However, the share price was also driven up by us and other potential buyers, with the average cost being about 8% higher than when we initially acquired the Kane family's shares.

Moreover, the further along the chain goes, the fewer shares remain in circulation, increasing the difficulty and cost of accumulating shares.

Chen Bingwen frowned slightly as he looked at the numbers on the blackboard.

23.8%, which is about 1.21% more than he wants to acquire.

This difference may not seem like much under normal circumstances, but it can be decisive in games involving control.

"What's going on with Cheung Kong Holdings?" Chen Bingwen asked.

"Yes," Xie Jianming answered affirmatively. "You can feel another group of funds absorbing the market. They are very skilled at it, trying not to cause drastic price fluctuations, but the buying is very decisive."

We believe it is highly likely that Cheung Kong Holdings has been secretly increasing its stake to solidify its position as the largest shareholder.

This situation was within Chen Bingwen's expectations.

Li Jiacheng would never sit idly by and watch himself easily obtain the veto power.

He remained silent for a moment, his mind racing with calculations.

The extraordinary general meeting of shareholders of Qingzhou Yingni will be held next Tuesday.

Prior to this, excluding today, there were only two trading days.

“Jianming,” Chen Bingwen instructed, “use all available funds and concentrate our strengths to increase Sugar Heart Capital’s stake in Qingzhou Yingni to 25.01% or higher before the shareholders’ meeting next Tuesday.”

25.01% is a threshold that is both psychological and practical.

More than a quarter of them have de facto veto power over many important matters.

Xie Jianming took a deep breath, knowing that this order meant enormous financial pressure and operational risks.

"Understood, Mr. Chen."

I will personally monitor the market and mobilize all resources to accumulate shares with all my might.

However, aggressive buying might drive the stock price even higher.

"Don't worry too much about the stock price; acquiring enough equity is the top priority at this stage."

Chen Bingwen decisively said, "If necessary, we can create some volatility to scare away some retail investors and small institutions from selling their shares." "Understood!"

Xie Jianming nodded emphatically, then immediately turned and walked towards the traders, beginning to quietly assign tasks.

Back in his office, Chen Bingwen once again pulled out the detailed information about Yingni in Qingzhou that Huo Duoli had sent him.

Under the Hong Kong Companies Ordinance at that time, the allocation of board seats relied more on agreements and negotiations between shareholders than on strict equity ratios.

The board of directors of Qingzhou Yingni consists of seven members.

As the controlling shareholder, Cheung Kong Holdings will inevitably maintain a firm grip on the majority of seats.

Based on the theoretical calculations of cumulative voting, Sugar Capital, holding 20% ​​of the shares, can theoretically secure 1 to 2 seats on the 7-person board of directors.

But this is only in theory.

In practice, controlling shareholders often dilute the influence of minority shareholders by appointing their own people to the independent director positions.

More importantly, the membership of core decision-making bodies like the finance committee is not determined by shareholding, but entirely by the appointment of the chairman of the board.

Even if Sugar Capital obtains a seat on the board of directors, if Li Jiacheng disagrees, they are likely to be excluded from the finance committee, unable to access the company's core financial and operational information, and have no say in major investment, financing, and asset disposal decisions.

If he holds more than 25% of the shares, he will have the right to veto major matters concerning the company.

This is a more coercive power that is not entirely dependent on the allocation of seats on the board.

Even if Vincent Fang and Ling Pei-yi are excluded from the Finance Committee, he can still veto major resolutions he opposes at the shareholders' meeting, forcing Li Ka-shing to negotiate with him.

There are only two trading days left until next Tuesday.

In such a short period of time, simply competing with Li Jiacheng in terms of capital and speed in the secondary market is not the best strategy.

Even if we manage to reach 25% in the end, the cost could be severe, resulting in heavy losses on both sides.

Moreover, this rush to buy shares will cause retail investors to hold onto their stocks, further reducing the number of shares available in the market and increasing the difficulty and cost of acquisitions.

To successfully secure two board seats at the extraordinary general meeting, he needs another card to play.

His gaze fell on the report on the table regarding the equity structure of Qingzhou Yingni.

Besides the two major shareholders, Cheung Kong Holdings and Sugar Heart Capital, and the retail shares circulating in the market, Qingzhou Yingni also has a number of small and medium-sized shareholders with shareholding ratios between 1% and 5%.

These shareholders together hold nearly 15% of the shares.

If we can secure the support of some of them, we can not only increase our chances of winning the shareholders' meeting vote, but also gain leverage in negotiations for board seats, and perhaps even secure a place on the finance committee.

The alliance of minority shareholders can sometimes achieve great results with minimal effort.

He picked up the phone again and connected to the office of his legal advisor, Gu Yongxian.

"Attorney Gu, it's me. How's the list of minority shareholders I asked you to compile coming up?"

“Mr. Chen, the preliminary list is ready,” Gu Yongxian replied. “There are 11 shareholders with more than 1% of the shares, mainly small trading companies, family trusts, and a few long-established wealthy families.”

The background and relationship with Cheung Kong Holdings are being further verified.

"Okay, give me the list and preliminary background information as soon as possible."

Additionally, prepare a simple communication outline, focusing on understanding their views on the company's dividend policy, current management, and whether they intend to sell their shares.

"Understood, I'll hand it in to you before I leave work today."

After hanging up the phone, Chen Bingwen breathed a slight sigh of relief.

It's always better to have multiple options than to gamble everything.

The buying frenzy in the secondary market must continue, and the united front work with minority shareholders must be launched immediately.

For the next two days, Chen Bingwen spent almost all his time in the office next to the investment department.

In the market, Qingzhou Yingni's stock trading is unusually active, with the stock price continuing to climb amid fierce competition between bulls and bears.

Xie Jianming led his team of traders, enduring high costs, to gradually absorb the sell orders on the market.

The shareholding ratio has been climbing up with difficulty.

24.1% 24.5% 24.8% Every tiny increase represents a real investment of money and a direct confrontation with the operators of Cheung Kong Holdings.

At the same time, Vincent Fang also led a team to secretly contact the small and medium-sized shareholders on the list.

The feedback was complex and contradictory.

Some shareholders are satisfied with Cheung Kong Holdings' management and have no intention of making changes;
Some, however, have expressed their dissatisfaction with the lack of increased dividends over the years;

Others are taking a wait-and-see approach, saying they need to see more concrete solutions.

At Friday's close, Sugarheart Capital's stake remained at 24.9%.

We are just 0.11% away from the target of 25.01%.

But this final 0.11% proved to be exceptionally difficult.

The supply of shares in the market seemed to have suddenly dried up, with very few sellers and a strong buying momentum.

The stock price was driven up to an astonishing level.

"Mr. Chen, the market has closed. The last 0.1% today came at a very high cost," Xie Jianming reported wearily. "Cheung Kong Holdings is holding firm, practically competing with us for every sell order."

Next Monday, the last trading day, I'm afraid...

“I know.” Chen Bingwen interrupted him, his voice calm but with an undeniable determination. “When the market opens next Monday, we will spare no expense and concentrate all our firepower. There is only one goal: to reach 25.01%.”

Once the target is achieved, immediately stop buying, and you can even sell some of the high-priced shares to lock in profits and recover funds.

"Understood!" Xie Jianming let out a heavy sigh of relief.

(End of this chapter)