Rebirth of the Hong Kong Millennium Conglomerate

In the late autumn of 1972, the sea breeze carrying the heat of money swept through the streets and alleys of Hong Kong, but it couldn't compare to the undercurrents surging in the business world.

Overnight, the front page, middle margin, and even the last page of several major Chinese newspapers affiliated with the Milk Company were filled with full-page articles about milk.

The headline, in white lettering on a black background, was particularly eye-catching, every word conveying a sharp and ruthless edge: "A warning to all shareholders: Do not fall into the trap meticulously woven by Jardine Matheson!"

In the movie, the board of directors of Milk Company denounced the "sinister intentions" of Hongkong Land's share swap acquisition, stating that the other party wanted to use the guise of capital operation to swallow up Milk Company's hard-earned business built up over decades.

The following day, Hongkong Land's counterattack came like a tidal wave. With the same full-page article and equally forceful wording, Hongkong Land not only denied the "trap" claim but also launched a counterattack, pointing the finger directly at the Dairy Farm board's "inaction."

For a time, the newsstands on the streets of Hong Kong, featuring mainstream newspapers such as The Daily News, Sing Tao Daily, Ta Kung Pao, and Wen Wei Po, became a virtual battlefield between the two giants.

Today Milk criticizes Hongkong Land for "wolfish ambitions," tomorrow Hongkong Land will mock Milk for "being complacent and stuck in its ways." The GG page has been expanded again and again, from half a page to a full page, from black and white to red, and the price has been soaring all the way, but it has made the newspapers grin from ear to ear - this is not a business war, but clearly a god of wealth delivered to their door.

Newspapers always have a keen sense of opportunity, so they certainly wouldn't miss such a golden opportunity to boost sales.

Major newspapers mobilized their best personnel overnight to create a series of supporting columns tailored for this business battle.

On the editorial page, the writers quoted extensively from classical texts, praising or criticizing, at one point saying that "Hong Kong Land's move is a pioneering step in the integration of Hong Kong capital," and at another saying that "Dairy's perseverance is the right way to protect minority shareholders."

The news flash section transforms into a war correspondent, meticulously capturing every move of the two companies, even interpreting a closed-door board meeting as implying "undercurrents" and "sudden changes in the wind."

The summary version goes on to detail the history of the two companies, from their origins as dairy farms to their land king project in Central, spanning thousands of words and seemingly trying to expose everything about them.

The happiest people in Hong Kong are undoubtedly the onlookers amidst this excitement.

In the teahouse, a stock investor put down his newspaper, stroked his beard, and talked eloquently, analyzing the pros and cons of the share swap ratio.

Outside the factory, young workers who had just finished their shift crowded around a newsstand, eagerly passing around the latest newspapers and praising the sharp wording in GG.

Even the students in the school were secretly discussing this "battle of the gods" during breaks, hoping that tomorrow's newspapers would break even more sensational news.

Everyone craned their necks, waiting to see how this grand drama would continue, hoping that this business war could last longer and be even more intense.

As the media offensive intensified, Hongkong Land further increased its investment.

A strongly worded open letter bypassed the newspaper and was delivered directly to every shareholder of the dairy company.

In the letter, the board of directors of Hongkong Land posed nine questions to the board of directors of Dairy Farm, each word piercing and incisive:

First, the company's profit outlook for 1973 and 1974 is a matter of vital interest to shareholders. Why is Milk keeping silent and refusing to disclose it?

Secondly, the company's net asset value is the cornerstone of the stock price. Milk Company owns many high-quality properties in Hong Kong, so why has it always been so secretive and unwilling to disclose this information?

Third, what are the underlying considerations behind the recent significant increase in authorized share capital? Is it intended to dilute equity and obstruct the acquisition?

Fourth, the proposed share swap by Hongkong Land is clearly fair and reasonable. Who is behind this, stirring up trouble and inciting shareholders to oppose it?

Fifth, the stock of milk has been sluggish in the stock market for a long time with sparse trading. Is such a lack of activity something that all shareholders should seriously consider?

Sixth, real estate operation requires specialization and expertise. How many real estate specialists does Milk have under its command?

Why did we sell off most of the land with great development potential in the past? Wasn't that a waste of resources?

Seventh, Hongkong Land's business footprint has long since expanded beyond Hong Kong, reaching as far as Southeast Asia, which is incomparable to milk.

Eighth, if the acquisition is successful, Hongkong Land promises to retain all employees of Milk Company, and the so-called concerns about "chaotic administration" are nothing but nonsense!

Ninth, regardless of the success or failure of the acquisition, it is normal for the share prices of both parties to fall. If shareholders accept the share swap proposal, what additional risk is there?

These nine questions are precise and effective. The sixth question, in particular, hits the milk company's weak spot—this long-established company, which started with dairy products, already had a weak foundation in the real estate sector, and its early sale of land was widely recognized as a "mistake."

The seventh question was a point of pride for Hongkong Land, as it was already the leading real estate developer in Hong Kong at that time, owning multiple landmark buildings in prime Central locations, and its strength was beyond doubt.

Between offense and defense, Landmark's confidence was fully revealed.

Faced with such an aggressive media attack from Hongkong Land, the Milk Company's board of directors naturally dared not sit idly by.

The following morning, Milk's Counterattack once again dominated prominent positions in major newspapers.

This time, they no longer dwelled on the "trap" theory, but instead pointed the finger at the core of Hongkong Land's acquisition—the share swap method.

In the GG, a line of bold black text stands out: "Investors, please think twice: What Jardine Matheson is offering is a stock-for-stock exchange, not a cash-for-stock exchange!"

The stock market is volatile, and stock prices fluctuate unpredictably. If you make a hasty decision, you must be extremely cautious and avoid missing out on long-term benefits due to momentary lapses in judgment!

At the end of the letter, the board of directors of Milk Company earnestly appealed to all shareholders to remain calm and wait for further notice from the company, and not to lose all future rights due to hasty actions.

This statement temporarily stabilized some of the wavering shareholders. However, the board of directors of Dairy Farmers knew that the war of public opinion required a decisive push, and only by unleashing more powerful weapons could they completely turn the tide.

Within three days, the milk industry launched its second major counterattack.

This time, they directly used the trump card of "asset revaluation".

In the center of the entire page, a bar chart stands out: a thick black pillar reaches from the sky, with the number "80" prominently displayed on it, representing that after expert revaluation, the asset value per share of Dairy Farm is as high as HK$80.

Two slender gray pillars stand side by side, each marked with "28", meaning that the asset value of each share of Hongkong Land is only HK$28, and the two shares together amount to no more than HK$56.

The text below GG is even more forceful and gets straight to the point: "Please, all shareholders, carefully and meticulously weigh the facts!"

The share swap plan by Hong Kong Land will result in a sharp decrease in your earnings per share, a reduction in your dividend per share, and the evaporation of your asset value per share! Two shares of Hong Kong Land will be exchanged for one share of Dairy Farm, resulting in a loss of HK$24 for you – a huge loss indeed!

At that moment, Zhang Zeyang was sitting in the living room, looking at the comparison picture, and couldn't help but chuckle softly.

In his view, the milk company's move was nothing short of a huge boast—a thick pillar pressing down on two thin pillars, seemingly straightforward and powerful, but in reality nothing more than a psychological tactic in the public opinion arena.

However, it must be said that this GG (Gross Gaming) article accurately hit Landsea's sore spot.

On the night GG published the article, a spokesperson for Hongkong Land held an emergency press conference, vehemently questioning the accuracy of the Dairy Farmers' asset revaluation and stating that the other party was "arbitrarily exaggerating the asset value in order to obstruct the acquisition."

At the same time, Hongkong Land quickly hired Hong Kong's most authoritative professional surveying firm to reassess its assets, determined to turn the tide on the data.

On November 21, 1972, newsstands in Hong Kong were once again sold out.

On this day, Landmark broke with tradition and published two full pages of GG in major newspapers, a feat unprecedented in its scale.

The first edition of GG, as always, relies on data. The eye-catching headline reads, "Reassessed by professional surveyors, Hongkong Land's asset value per share soars to HK$51!"

Based on this figure, the combined asset value of the two Hongkong Land shares would reach HK$102, far exceeding Dairy Farm's claimed HK$80 per share.

In GG, the author confidently addressed the dairy shareholders: "Based on this calculation, the share swap would be entirely beneficial to all shareholders, so why not do it?"

In an era when capital market regulations were still incomplete, no one could find any obvious fault in such a data manipulation.

After all, asset valuation is inherently subjective. You might say your land is worth a fortune, while I might say my property is worth a fortune. It all depends on the words of the "experts" we each hire. How the accounts are calculated depends entirely on who has the loudest voice and the most confidence.

The other version of GG takes a more approachable route. Hongkong Land details the specific procedures for the share swap, informing Milk Company shareholders that anyone who accepts the share swap proposal will receive Hongkong Land's new shares within four days. The process is simple and fair.

To completely dispel shareholders' concerns, Hongkong Land released a bombshell announcement – ​​canceling the conditions attached to the acquisition.

Previously, Hongkong Land's acquisition plan stipulated that "the share swap shall be accepted for no less than 90% of the issued shares of Dairy Farm International Holdings Limited, or a lower percentage as determined by Hongkong Land." Now that this clause has been completely abolished, it means that no matter how many shareholders accept the share swap, Hongkong Land's acquisition plan will proceed as scheduled.

This move was undeniably ruthless.

However, the Milk Company's board of directors retaliated just as swiftly and accurately.

On the same day, Milk's GG once again made headlines in major newspapers.

This time, instead of revealing their own asset data, they directly seized on Hongkong Land's "weak point" and asked a probing question: "On October 30 this year, your company publicly declared that, based on the board's recent valuation standards, Hongkong Land's net current assets were no less than HK$17.5 billion, equivalent to approximately HK$28 per share."

However, GG claimed yesterday that each share of Hongkong Land was worth HK$51, which translates to a total current asset value of approximately HK$32 billion.

May I ask your company, how did your net current assets increase by HK$14 billion in just a few weeks?

How can such contradictory statements possibly gain the trust of all shareholders?

This question hits the nail on the head. With its asset valuation nearly doubling within weeks, such an outrageous increase would raise suspicions in anyone's mind.

In an instant, the public opinion field in Hong Kong was in an uproar.

The battle between Hongkong Land and Dairy Farm has entered a heated phase.

Today you post a valuation report, tomorrow I'll point out a data flaw; today you promise stock swap benefits, tomorrow I'll question your integrity.

The two sides went back and forth, neither willing to give an inch, and each piece of GG was like a bombshell, creating waves in Hong Kong's capital market.