Top of the Great Era

Chapter 1422 I'm Thinking About Buying the Bottom

Chapter 1422 I'm Thinking About Buying the Bottom
It was supposed to sleep at night, but it was still daytime in the United States, and Zhou Buqi was full of energy, which made Han Yan and Chen Yan suffer, and all kinds of tricks alternated.

In the middle of the night, Zhou Buqi let them go, put on pajamas and left the bedroom.It was found that Sun Guanran and Ning Lu were watching a movie in the living room, and they didn't feel sleepy at all.

"Has there been any specific news from MGM?"

"Well, here we come! It's in the study!"

Sun Guanran and Ning Lu got up together and followed him to the study.

This is Mr. Han's large flat floor, the area is not as big as Zhou's villa, you have to run upstairs and downstairs.Just after turning a corner, Sun Guanran said softly, "It's true, Warner offered 15 billion dollars to acquire MGM, including 37 billion dollars in debt."

Zhou Buqi twitched the corner of his mouth, "The price is too low! It's no wonder they can sell it!"

Sit down and read the material.

Ning Lu has already organized some documents and translated them into Chinese.Zhou Buqi can also read English materials, but it is still convenient to read in Chinese, ten lines at a glance.

It turned out that this was related to last year's subprime mortgage crisis!

Last year, the subprime mortgage crisis broke out, which had a severe impact on the banking industry. Many large banks closed down due to a run on their capital chain, or were packaged and sold.

In order to withdraw funds and survive the crisis, many banks have to sell financial assets at low prices to survive!
For example, last year Zhou Buqi and Xu Baihui engaged in a wave of "complex investment" business in Hollywood, in fact, they bought their movie platter shares from major financial institutions at a low price.

Banks and financial institutions received cash, and Jieyu Media received shares, including classic series such as "Avatar", "Fast and Furious" and "Twilight".

So did MGM's creditors.

Last year, two hedge funds bought all of MGM's debt for 50 to 60 cents to the dollar, for a total of $1 billion.The reason for making this investment is because they concluded that MGM could not repay its debts and would go bankrupt.

Once MGM goes bankrupt and reorganizes, it must use the debt-for-equity swap model to convince creditors.

At that time, MGM's existing shareholders will be stripped of all their shares, and creditors will own 100% of MGM.In other words, they only need to spend 17 billion US dollars to own this veteran Hollywood giant that the Sony consortium spent a full 4 billion US dollars to complete the acquisition 48 years ago.

The level of this bottom-hunting is much better than Zhou Buqi.

Zhou Buqi is playing with foresight, and he really relies on his keen insight into the capital world to complete the bottom-hunting harvest.Zhou Buqi called Erica, an investment consultant in charge of capital operations, and told him about it.

He feels like he has a great chance!
The two hedge funds are betting that shareholders will abandon MGM, no longer inject capital into MGM or assume debt, resulting in MGM bankruptcy.

If someone makes a move at this time and helps MGM survive the bankruptcy crisis, the hedge fund's calculations will come to naught. The $37 billion in debt may be difficult to change hands, and they can only collect about $2.5 million in interest from MGM every year.

This way of making money by collecting interest slowly is obviously not what hedge funds like.

At that time, Zhou Buqi will have the opportunity to pack up and eat up their debts at a price much lower than 37 billion US dollars.Taking down the MGM debt is tantamount to owning MGM.

Sure enough, Erica confirmed this line of thinking.Next, it depends on whether the shareholders of MGM are willing to continue to contribute money to help MGM tide over the difficulties.

If they are willing to pay, no one can help, they are the actual controller of MGM.

But in the current economic situation, they can't afford to pay.

MGM is already insolvent.

This is a bottomless pit.

Erica went on to say: "Now, MGM has received a total of two acquisition offers, one from Time Warner, they invested $15 billion, and one from Lionsgate, they invested $18 billion."

Zhou Buqi asked, "Why is the price so low?"

Erica said with a smile: "In fact, it is the coordination between the equity party and the creditor party. For example, Time Warner invested 15 billion US dollars. The specific operation process is to transfer all the shares from MGM shareholders at a price of 0 yuan. Buy it, and then buy the debt from creditors at a price of US$15 billion. If it really reaches the level of bankruptcy and liquidation, an additional US$2-3 million may be wasted in asset restructuring, which will cause huge waste .”

Zhou Buqi laughed and said, "They bought the debt for 17 billion dollars, and they are waiting to make a fortune. Time Warner bought it for 15 billion dollars? Buying the bottom of other people's bottom? You really think about it!"

Really amused.

This is the second time.

The last time was EMI Records.

The creditor of EMI is Citibank, and it has been reported before that Time Warner will pay for the debt of Citigroup, and then wait for EMI to go bankrupt, so as to realize the control of EMI and complete the ultra-low price acquisition.

If it is done, it will become a classic case of capital operation.

But here comes the question, why Warner?
Want to play capital operations from Citigroup and hedge funds to suck their blood, don't you think too much?
In comparison, Lionsgate's offer is solid.

$ 18 billion.

Others bought the debt at a price of US$17 billion last year, and Lionsgate took over the debt at a price of US$18 billion, leaving a profit margin of US$1 million for others...

It's so ridiculous.

I don't know if the Hollywood group is shrewd or stupid. They are a bit too overwhelmed. They want to cut the leeks of capital from Wall Street and steal the bottom of capital.

For Zhou Buqi, he felt relieved.

It is impossible for MGM and creditors to accept the offer from Warner and Lionsgate.

Zhou Buqi asked: "When will our acquisition plan be produced?"

Erica said: "The team is working hard and is making further statistics and evaluations of MGM's finances, and strives to report the plan to you within a week."

Zhou Buqi asked again: "What is the current financial situation of MGM? Has it been found out?"

Erica smiled and said: "Well, I just learned that it is very serious! Very serious! Just this morning, MGM urgently held a meeting of creditors. They have to repay 2.5 million US dollars in debt interest this year, and there is still a shortfall of 1.5 million US dollars. The funds are used to maintain the filming plan, and they can’t even come up with the 2000 million US dollars needed for short-term capital turnover. It is said that they intend to borrow another 3 million US dollars in debt to push the debt to 40 billion US dollars, first to get through the current crisis, and to stay take longer to complete the sale or reorganization of the company."

Zhou Buqi frowned, "We must find a way to stop them!"

Erica froze for a moment, "How to stop it?"

Zhou Buqi was very decisive, "It's this time, why are you still making movies? All MGM's production plans have been suspended! Then, we will prepay 2000 million US dollars to help them survive the immediate crisis."

"Prepaid?"

"Compensation clauses with regulatory scrutiny."

"This……"

Erica's heart was shocked and she was very surprised.

The acquisition of a large company like MGM needs to pass the review of the regulatory authorities.During this process, the acquirer and the acquiree will sign a compensation agreement.

If the transaction is not approved by the regulatory authorities, the acquisition will fail.The acquirer has to pay a compensation of about 2% of the total transaction amount as compensation to the acquired party.

In other words, if "Ziweixing Global" acquires MGM for a total price of 20 billion US dollars, it may have to sign a compensation clause worth 4000 million US dollars.

Once the regulatory approval fails and the acquisition fails, MGM will be compensated with US$4000 million.

This is the common practice of capital operation.

But the problem is...

At present, Erica's team has not fully understood MGM's financial situation and debt situation, and it will take nearly a week to sort out all the rules and regulations.

If you don't even know the financial situation of the acquired company, how can you do this deal?The more detailed the due diligence, the less risk there is.What if there is still some financial thunder hidden in MGM?If this is not discovered before the acquisition, it will be miserable!

Just like when many state-owned enterprises go overseas for acquisitions, after the acquisitions are completed, they are horrified to discover various minefields and get caught again and again.In name, the transaction failed, but in fact it was the loss of state-owned assets.

Erica was a little apprehensive, "This...isn't this a bit sloppy?"

"No matter what, we must buy MGM! Take two paths together, pay the advance payment first, and don't let MGM borrow any more, it's too bad. Due diligence should be completed as soon as possible. There are so many consultants in the team. Hollywood veterans, I believe MGM dare not lay mines on them. Just do it!"

Zhou Buqi has the foresight, he knows that MGM has no minefields.

In the previous life, MGM went bankrupt and reorganized smoothly a year later, and then filmed "007" and "The Hobbit", turned around in one fell swoop, until it was acquired by Amazon for 85 billion US dollars ten years later.

The current MGM is considered by the industry to not even be worth 20 billion US dollars, and has room for 4 times the growth.

This is still the result of the previous life.

If Zhou Buqi is in charge of MGM, he feels that he can manage MGM better!

At least the development of the "Hobbit" series is too stupid, and it earns a lot, but most of the profits fall into Warner's pockets, which is not acceptable!

……

Airport, go to the capital.

Han Yan and Chen Yan were stunned.

Change the plane!

"Let's go." Zhou Buqi pushed the two of them behind him, a little funny, "It's not the first time to take a private jet, are you still nervous?"

Only then did Han Yan get on the plane in a daze, and she felt that the plane was spacious and grand, with the layout like a mansion at home, including bedrooms.

Chen Yan said weakly, "You... have you changed planes?"

Zhou Buqi said: "Not really, that plane will fly domestically in the future, and this plane will mainly fly international flights. The two planes will be used together. Let's go to the bedroom before the machine shakes."

Han Yan didn't understand, "What camera shock?"

Zhou Buqi said: "Didn't I take you two cars through the shock, isn't it more exciting on the plane?"

"Farewell," Han Yan bit her lips, not wanting to cling to him, she leaned over and whispered softly, "Master, don't always think about playing with women, it's time to rest and pay attention to your body."

Zhou Buqi said: "I like playing with you two."

Han Yan softly persuaded: "If you like to play, you should stop in moderation. Be obedient and take a rest. Don't be too tired."

Zhou Buqi hesitated for a moment, then looked at Chen Yan, "Mr. Chen, what do you think?"

Chen Yan pursed her lips and said, "Don't you want to go to England in a few days? It will take more than ten hours to fly, right? Let's talk about it at that time. It's so close to the capital, and we will arrive in a while. It's really fun, and there is not enough time. "

Zhou Buqi took it seriously, "Well, you are right, let's talk about it later."

(End of this chapter)

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