Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 201 Absolute Control (Seeking monthly votes, recommendations, and subscriptions!)
"Yes, the business world is like a battlefield; we can't give him any chance to breathe."

Chen Bingwen continued, "While announcing that the acquisition will continue, we are also preparing a second plan."

Fang Wenshan said on the other end of the phone, "Mr. Chen, please speak."

"Once we hold more than 45% of the shares, we will immediately initiate a motion to convene an extraordinary general meeting in the name of Sugar Heart Capital and Qingzhou Yingni, the newly emerging major shareholders."

"What kind of motion is it?"

"Two."

Chen Bingwen said coldly, "First, we need to reorganize the board of directors and obtain more than half of the seats."

Secondly, and most importantly, a proposal is put forward: authorizing the company to issue new shares to cover development costs of the Hung Hom Hok Yuen Street plot and to supplement working capital.

Fang Wenshan immediately understood the killer move.

"If we, as the major shareholder, subscribe to all the newly issued shares, Li Jiacheng's equity will be significantly diluted."

"If he invests in this project, he will have to put up real money, further straining his already tight cash flow."

If he doesn't follow suit, his influence will diminish until he's out of the game.

Chen Bingwen calmly said, "We need to force him to make a choice: whether to cut off his arm to survive or be slowly dragged down."

Furthermore, the size of the new share issuance needs to be carefully calculated to achieve a significant dilution effect without being overly aggressive and attracting unnecessary regulatory attention. The specific proportions will be precisely calculated by the finance team.

"Understood. I will come up with a solution that will cost Cheung Kong Holdings dearly, but will also meet the company's development needs from the outside."

Fang Wenshan replied, "What about the communication with Li Jiacheng himself?"

“There’s no need to communicate for now,” Chen Bingwen replied calmly. “He will come to us naturally once the motion is formally put forward.”

At that time, he was the one who needed to make the choice.

"Okay, Mr. Chen. I'll take care of it right away."

After hanging up the phone, Chen Bingwen leaned back in his chair.

Issuing new shares is an open conspiracy, and Li Jiacheng only has two choices: either follow along or not.

However, his cash flow may not be able to withstand it.

If he doesn't cooperate, then take the opportunity to get rid of him.

Qingzhou Yingni is the shell he prepared for Chenji's future listing, and he must have complete control over it, allowing no obstacles or potential risks.

Li Jiacheng, this variable, must be eliminated.

In the following days, the market clearly felt Sugar Heart Capital's determination and efficiency.

Faced with a cash takeover offer with a premium of up to 50%, and especially with its biggest competitor, Cheung Kong Holdings, having already backed down, minority shareholders and retail investors had an extremely strong desire to sell.

Chen's investment department processed these equity transfer procedures extremely quickly, and the fund settlement was never delayed.

Every day after the market closes, Vincent Fang would promptly report the latest developments.

"Chen Sheng holds 43.1% of the shares."

"Mr. Chen, it's 44.5%."

Every percentage point increase means taking a step closer to absolute control, and also means that Li Jiacheng's bargaining chips are relatively depreciating.

Cheung Kong Holdings headquarters, Chairman's office.

Li Jiacheng threw the day's equity change report on the table with a soft "thud".

His face was gloomy, and his sharp gaze swept over Hong Xiaolian in front of him.

"He's trying to wipe them out completely, leaving no room for maneuver."

His voice suppressed a barely concealed rage.

The passive situation that had persisted for several days put immense pressure on this businessman, who was known for his composure.

Hong Xiaolian cautiously reported, "Mr. Li, Sugar Heart Capital's shareholding is about to exceed 45%."

Their investment of such a large sum doesn't seem like they're merely content with being a major shareholder; it seems more like they're seeking absolute control.

Her words shattered Li Jiacheng's worst premonition.

If Chen Bingwen's goal is absolute control, then the significance of Cheung Kong Holdings' stake in Qingzhou Yingni is entirely different.

It has transformed from a bargaining chip that could be used to participate in games and exert influence into a purely financial investment.

However, with a major shareholder who intends to gain absolute control, the original balance is completely broken, and the will and voice of minority shareholders will be greatly weakened.

"Absolute controlling stake," Li Jiacheng repeated, his mind racing.

Market changes have confirmed this.

Due to Sugar Heart Capital's premium acquisition offer, Qingzhou Yingni's stock has become a highly sought-after commodity in the market.

Both institutional and retail investors are trying to absorb the scattered sell orders, hoping to resell them to Sugar Heart Capital and earn the price difference.

If Cheung Kong Holdings were to reduce its holdings at this time, it would be essentially giving the market a bargain, indirectly helping Sugar Heart Capital complete the acquisition more quickly.

“Mr. Li,” Hong Xiaolian whispered, breaking the silence, “the cost of our previous purchases was already quite high in order to maintain our shareholding ratio.”

Sugar Capital is now offering such a high premium. If we choose to accept part of the offer now, we can actually recoup a large sum of money.

This money is crucial for alleviating our current financial pressure, dealing with the Tin Shui Wai project, and even... preparing for potential transactions.

Her words were blunt, but they hit the nail on the head.

Continuing to stubbornly hold on will only lead to a dead end, with no hope of turning the situation around and leaving us trapped in this investment, wasting precious cash flow.

Cutting off an arm to survive may be undignified, but it can bring in real money to support other, more important battles.

Li Jiacheng leaned back in his chair, closed his eyes, and took a deep breath.

In the business world, sometimes taking a step back is for the sake of moving forward better.

It is foolish to stubbornly defend a position that is destined to be lost.

A few minutes later, he opened his eyes, his gaze regaining its usual calmness and decisiveness.

“Contact our brokerage firm,” he instructed calmly, “and begin gradually reducing our holdings in Qingzhou Yingni through the secondary market, or directly see if Sugar Heart Capital is willing to agree to take over a portion of the shares.”

The price will be the acquisition price they announced.

"Understood, Mr. Li." Hong Xiaolian nodded immediately, relieved. Although the decision was difficult, it was undoubtedly the most rational choice at the moment.

"The action must be swift and discreet," Li Jiacheng added. "Avoid causing unnecessary market volatility."

"Yes, I'll handle it myself."

Almost at the same time that Cheung Kong Holdings began its secret share reduction, Vincent Fang, who had been closely monitoring the changes in the Qingzhou Yingni stock market, immediately noticed the subtle shift in the market.

“Mr. Chen, there are new and relatively concentrated sell orders in the market. The volume is not large, but it is very continuous, and the sellers are very skilled at unloading their shares.”

Fang Wenshan reported, "Based on previous information, it is very likely that Cheung Kong Holdings is making tentative shipments."

"No need to go out of your way to pick it up, and don't try to lower the price," Chen Bingwen instructed. "Continue to proceed with our original acquisition plan."

We'll buy as much as he sells, as long as the price is right. Let's speed things up.

"Okay." Two days later, Sugar Heart Capital's stake in Qingzhou Yingni officially exceeded 45%.

Immediately following the plan, Fang Wenshan, in the name of Sugar Heart Capital and a major shareholder of Qingzhou Yingni, formally sent a letter to the board of directors of Qingzhou Yingni, requesting an extraordinary general meeting of shareholders.

The letter put forward two specific motions: First, to reorganize the board of directors and re-elect directors, with Sugar Heart Capital demanding a majority of seats.

2. The company is authorized to issue new shares to raise funds for detailed planning, preliminary development, and replenishment of the company's working capital for the Hung Hom Hok Yuen Street plot.

The letter was based entirely on the company's articles of association and regulations, leaving no room for criticism.

The news caused an uproar in the market.

This second motion, especially the issuance of new shares, has a potential destructive power that seasoned investors can see at a glance: it is aimed at diluting the equity of other shareholders!
Sure enough, on the day the letter was published, Li Jiacheng called Chen Bingwen's office directly.

"Mr. Chen, impressive tactics." Li Jiacheng's voice came through the receiver, revealing little emotion, but without his usual pretense, he went straight to the point, "Issuing new shares to kick me out?"

Chen Bingwen, holding the phone, smiled faintly and said, "Mr. Li, you flatter me. The company needs funds for development, and the land in Hung Hom has huge potential. Developing it as soon as possible will benefit all shareholders."

Issuing new shares is the most common way to raise funds, so how can it be considered "kicking someone out"?

There was silence on the other end of the phone for a few seconds.

“Let’s not beat around the bush.” Li Jiacheng’s voice lowered a few degrees. “If Mr. Chen wants Qingzhou Yingni, I can grant his wish.”

But the shares I hold weren't picked up off the street.

"What does Mr. Li mean?"

“Agreement transfer.” Li Jiacheng laid it all out directly. “I currently still hold 28.7% of Qingzhou Yingni’s shares.”

I can transfer all of it to Sugar Heart Capital.

The price will be the acquisition price you announced, but it must be a one-time cash transaction.

Chen Bingwen's lips curled up almost imperceptibly.

This was exactly the result he wanted.

Acquiring Li Jiacheng's 28.7% stake in one go would require a large sum of cash.

However, the advantage is that it can completely resolve potential problems and give you full control of the company, which is much cleaner and more efficient than gradually increasing the share price to dilute the assets.

"Yes. Sugar Heart Capital is indeed confident in the long-term development of Qingzhou Yingni."

Since Mr. Li intends to withdraw, we can take over.

Chen Bingwen answered crisply, "I'll have Director Fang Wenshan coordinate with your team regarding the specific details."

Cheung Kong Holdings is also a well-known company, and I trust Mr. Li's reputation.

“Okay.” Li Jiacheng readily agreed. “I will have Secretary Hong contact Director Fang.”

After that, hang up the phone.

Chen Bingwen put down the receiver and said to Fang Wenshan, who was standing next to him, "I'm leaving the negotiations with Cheung Kong Holdings to you."

Finalize the agreement and complete the transfer of ownership as soon as possible.

“Understood, Mr. Chen,” Fang Wenshan said with a smile. “With this, plus what we acquired before, our shareholding in Qingzhou Yingni will exceed 73%, and our absolute controlling stake is secured.”

“Okay.” Chen Bingwen nodded. “The motion to issue new shares will be put on hold for now. We will decide whether to proceed once the share transfer is completed.”

"Yes."

The negotiations between the two parties proceeded exceptionally smoothly.

Li Jiacheng urgently needed cash, and Chen Bingwen didn't want to get entangled with him any further.

Both parties are willing to settle the matter as soon as possible, and the price is readily available; what remains are mainly legal documents and payment procedures.

Sugar Capital will acquire all of the shares of Qingzhou Yingni Co., Ltd. held by Cheung Kong Holdings for a cash consideration, representing 28.7% of the total share capital of Qingzhou Yingni.

Following the completion of the transaction, Sugarheart Capital will hold a total of 73.7% of the issued shares of Qingzhou Yingni, becoming its controlling shareholder.

Cheung Kong Holdings no longer holds any shares in Qingzhou Yingni.

The moment the agreement was signed, Chen Bingwen felt certain.

Qingzhou Yingni, the shell prepared for Chenji Foods' listing, has finally fallen completely into his control.

A day later, Sugarheart Capital and Cheung Kong Holdings jointly issued an announcement.

Sugar Capital will acquire all of the shares of Qingzhou Yingni Co., Ltd. held by Cheung Kong Holdings for a cash consideration, representing 28.7% of the total share capital of Qingzhou Yingni.

Following the completion of the transaction, Sugarheart Capital will hold a total of 73.7% of the issued shares of Qingzhou Yingni, becoming its controlling shareholder.

Cheung Kong Holdings no longer holds any shares in Qingzhou Yingni.

The announcement caused an uproar in the market.

It was only then that everyone realized that this sudden acquisition battle had ended with Li Jiacheng's complete withdrawal.

Sugar Heart Capital and Chen Bingwen's name have become the focus of attention from all parties.

However, for Chen Bingwen, who was involved, taking over Qingzhou Yingni was only the first step.

Next, there are countless things waiting for him to do, such as the planning and development of the Hung Hom site, Hutchison Whampoa's strategic moves, deepening his presence in the North American market, and rebranding Wanglaoji.

Especially Hutchison Whampoa.

There, his battle with Li Jiacheng and HSBC's Shen Bi had only just begun.

(End of this chapter)