Rebirth of the Hong Kong Millennium Conglomerate

In the late autumn of 1972, the air in Hong Kong was filled with the scorching smell of gunpowder, even more intense than the sea breeze.

The takeover battle between Hongkong Land and Dairy Farm, after several rounds of verbal sparring, has long since evolved from a war of words on paper into a showdown that has gripped the entire Hong Kong capital market.

Just as the public was abuzz with the Rashomon-like debate over the valuation of the assets of both parties, Henry Keswick, the helmsman of Hong Kong Land and a powerful foreign tycoon in the Central business district, finally broke his days-long silence by personally taking the stage.

Wearing a well-tailored dark suit and gold-rimmed glasses, Henry Keswick sat in the boardroom on the top floor of the Landmark headquarters. The long table in front of him was covered with a tablecloth with the company logo embossed in gold. Dozens of reporters from various media outlets crowded in a corner of the room, and the sound of camera shutters was constant.

This composed British tycoon showed no sign of panic when facing the camera, speaking calmly and directly addressing the core questions previously raised by the Milk Company's board of directors.

"Regarding the discrepancy in the valuation of the land assets before and after the valuation, I think it is necessary to provide a clear clarification to all shareholders and the public in Hong Kong."

Henry Keswick's voice, transmitted clearly through the microphone, reached every corner of the venue.

"On October 30, the company's board of directors announced the asset valuation, which adopted an extremely prudent investment principle."

At that time, for properties that had been completed and put into operation, we calculated their value using a long-term investment return model.

For plots of land and projects still under development, the valuation will be adjusted appropriately based on the progress of the project and the market environment.

This is a conservative and responsible valuation method, aimed at presenting shareholders with a solid financial statement.

Before the words were even finished, a murmur of discussion arose from the audience. Reporters frantically scribbled notes, afraid of missing any crucial information.

Henry Keswick raised his hand slightly to signal the room to quiet down, and continued, "The valuation report that sparked heated discussions on November 20 was calculated by the most authoritative professional surveying firm in Hong Kong, based entirely on the real-time market price. Furthermore, the entire valuation process was reviewed and approved by another independent professional institution, so its fairness and rigor are beyond doubt."

He paused, his gaze sweeping over the reporters with their varied expressions below the stage, his tone carrying an undeniable certainty: "You should all understand that valuation based on investment principles and valuation based on public market prices are two completely different pricing logics."

The scarcity and appreciation potential of the properties in the core Central district held by Hongkong Land in the open market far exceed what investment return models can capture.

Two standards will naturally yield significantly different asset values, and there is nothing fishy about it.

His remarks were clear, logical, and well-organized. They not only defused the sharp questions raised by the Milk Company's board of directors regarding the "sudden increase in asset valuation," but also subtly demonstrated Hongkong Land's professionalism and openness.

Henry Keswick's brilliance goes far beyond that—while gently dispelling the doubts about the valuation, he then launched a sharp counterattack.

"Dairy Company previously announced a high-profile asset value of HK$80 per share, but has never disclosed to the public the specific standards and details on which its valuation was based."

Henry Keswick's tone was somewhat playful, and a faint smile appeared at the corner of his mouth. "However, I am willing to believe that the professional valuation standards upheld by our company are roughly the same as those used in the milk industry."

This seemingly mild statement actually contains a hidden veil of sarcasm.

As soon as he finished speaking, his tone suddenly became sharp: "But I must remind all speculators and shareholders that a real real estate company should have the confidence to make a fair valuation of its own assets at the open market price."

But if an organization whose core business is dairy product trading insists on selling off the properties it relies on to maintain its daily operations to raise cash as so-called "development capital," how can it explain this behavior to all shareholders?

These words caused an uproar. Everyone understood that Henry Keswick was subtly criticizing the Milk Company for its unstable foundation and its reliance on asset sales to embellish its asset valuation. The accuracy and sustainability of its asset revaluation were highly questionable.

This subtle yet powerful counterattack was more damaging than any previous GG incident, instantly shifting public attention back to the dairy company's Achilles' heel.

Henry Keswick's personal involvement undoubtedly injected a strong boost into Landmark's public relations campaign.

Meanwhile, Hongkong Land's ground offensive was also proceeding at full speed, giving the Milk Company's board of directors no chance to catch their breath.

As Hongkong Land's trusted advisors, top investment banks Jardine Fleming and Wardley Scott became the vanguard of the share swap operation.

They frequently appealed to Dairy Farm's shareholders through various channels, including newspapers, radio broadcasts, and leaflet distribution, urging them to quickly send or personally deliver their Dairy Farm shares to the Landmark Central Registry on Pedder Street in Central to complete the registration so that they could smoothly accept Landmark's share swap proposal.

Both GG and the announcement prominently display an unmissable date—November 29th, the final deadline for share swap registration.

In an effort to dispel the wait-and-see attitude of some shareholders, Hongkong Land even included a warning in its announcement: "We urge all Hongkong shareholders not to delay taking action until the last minute."

If the share swap registration cannot be completed smoothly due to incomplete procedures or failure to meet conditions, all losses will be borne by the shareholders themselves.

This warning was like a boulder thrown into a calm lake. As November 29th drew ever closer, Hong Kong's capital markets became completely agitated.

Every day at the crack of dawn, a long, winding queue forms outside the Landmark Central Registry on Pedder Street in Central. Wealthy businessmen in suits, ordinary citizens carrying cloth bags, elderly men with gray hair, anxious housewives… all sorts of Milk Company shareholders gather here, clutching their yellowed stock certificates tightly, their faces filled with anxiety and anticipation.

Inside the registration office, staff were extremely busy, with the hissing of the money counting machine, the clicking of the printing machine, and the inquiries of shareholders all mixed together.

Seeing that the number of shareholders coming to exchange shares was increasing day by day, the Central Registry was already overwhelmed. Hongkong Land made a quick decision to urgently set up a new share exchange office at Star House on Salisbury Road in Tsim Sha Tsui, Kowloon Peninsula.

As soon as the new office opened, it was packed with shareholders who had come after hearing the news. Even the office manager, who was used to big events, couldn't help but gasp in amazement at the scene.

As the share swap frenzy swept through Hong Kong, an even more impactful rumor began to quietly spread in the market—well-informed sources revealed that Hongkong Land, through days of share swaps and covert acquisitions, had acquired more than 51% of Dairy Farm's shares.

51%—everyone knows what that means. If the rumors are true, Hongkong Land will firmly control the Dairy Farm International Holdings Limited, and this protracted takeover battle will finally come to an end.

This rumor, like the last straw that broke the camel's back, made the already wavering milk shareholders even more panicked, and the crowds heading to the registry office to exchange shares reached an unprecedented peak.

Faced with the escalating rumors, Dairy Farm's advisory team immediately stepped forward to clarify, earnestly stating that "the rumors are untrue and Hongkong Land does not have absolute control." However, such a weak and feeble explanation seemed so insignificant in the face of the surging wave of share swaps.

Although the Milk Company's board of directors continues to resist stubbornly, it is clear from the discussions on the streets and the long queues at the registration office that the balance of this acquisition battle is irreversibly tilting in Hongkong Land's favor.

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