Rebirth: The Era of Hong Kong Tycoon

Chapter 214 [M&A]

Just after the Lunar New Year, a major event happened in Xiangjiang: Evergrande Holdings Group acquired the American-controlled Mego Corporation at a price of 1.25 million Hong Kong dollars. The properties of Mego Corporation include the Hilton Hotel in Hong Kong Central and the Hyatt Regency Hotel in Bali, Indonesia.

The business community in Xiangjiang is exclaiming - Huazi has risen. This is the first time that Xiangjiang Huazi has acquired a foreign-funded company, and it is an event that is enough to be recorded in history.

Of course, many people thought that Lin Rongheng's bid was too high!
Although the Hilton Hotel in Central has an excellent location, its area is only 3.9 square feet, and the hotel is managed by the Hilton Group, so it needs to pay a management fee every year. This asset of 8000 million Hong Kong dollars is worth it; but the Hyatt Hotel is definitely not worth it 5000 million Hong Kong dollars. Although Bali, Indonesia is a tourist area, the property in Indonesia is not worth much at all. Compared with Xiangjiang, it is a land and a sky.

Lin Rongheng didn't think it was expensive at all, but thought it was cheap to buy.

After buying Meigao Company, Lin Rongheng did not intervene in the operation of the two hotels, but only sent accountants, auditors, and lawyers to the two hotels to receive them normally, and then ignored them.

Lin Rongheng definitely wants to demolish the Central Hilton Hotel, but at least it will be in the late 80s; one side of the Hilton Hotel is HSBC Bank, and the other side is the future Bank of China Tower. trick.

In the battle of Feng Shui, don't give up an inch!
In this wave of bottom-hunting real estate, Lin Rongheng's personal company has already bought the Chinese Bank, the former site of British American Tobacco, three high-quality buildings, Meigao Company, and properties of about 2 million Hong Kong dollars, spending a total of about 6.5 million Hong Kong dollars.

Among them, the dismantling of the Chinese Building has already started, and a modern grade-A commercial building will be built. The building area is 25 square feet and the building is 22 stories high. Humidity, lighting, and fire protection facilities are all controlled by computers; the interior decoration should be luxurious and elegant, integrating ethnic style and modern atmosphere.The entire project cost is estimated at 2 million Hong Kong dollars. After completion, all office buildings and shops will be rented out. It is expected to be completed by the end of 1977.

In addition to the Chinatown, the blueprint for the former site of British American Tobacco is also being designed. The land is located in Wan Chai, on the verge of Victoria Harbour, and the buildings built have a good view. The land has more than 9 square feet and can be used to build two high-quality buildings. The area is 82 square feet; the ground floor is shops and the upper part is office buildings.The entire project costs 2.2 million Hong Kong dollars and is expected to be completed in 1978.

The remaining three high-quality buildings had to be demolished and rebuilt in 1976.

As for properties worth 2 million Hong Kong dollars, most of them will be sold to Evergrande Real Estate at the peak of real estate.

Of course, bottom-hunting is still in progress, and the intensity this year will be even stronger than last year.

Not long after the beginning of 1975, although the securities market was still weak, trading was not very active, and the trading volume hit new lows repeatedly, showing that market confidence had not yet recovered.Although the overall investment climate is unsatisfactory, individual entrepreneurs with foresight have already deployed various acquisitions and mergers one step ahead.

In mid-January, Swire Pacific took the lead in issuing 1 million new shares in exchange for 280 million shares of Taikoo Development, a subsidiary of Dachang Properties, and then transferred the shares to Swire Properties; Taikoo Development issued another 1050 million new shares with Swire Properties, in exchange for a 1210% stake in the first phase of the Taikoo Dockyard development plan (Taikoo Shing Phase I), and Taikoo Chang will transfer the land in the eastern part of Aldrich Bay to Swire Pacific at a low price.

Through this game of allotment, share exchange and issuance of new shares, the equity of minority shareholders will naturally be 'diluted', while the strength of the enterprise will grow rapidly.

Swire Pacific is taking action, and Evergrande Real Estate is not far behind. In terms of playing equity games, Lin Rongheng is the ancestor of these people.

Lin Rongheng summoned Evergrande's management team, and said immediately: "Swire Pacific has made a head start for us, we can't fall behind! The company only relies on its own funds to buy, buy, buy, and after all, it will be strong and slow!"

Last year, Evergrande Real Estate had 8.8 million Hong Kong dollars in funds, of which 2.8 million Hong Kong dollars were used for the reconstruction of commercial buildings, of which 6 million Hong Kong dollars were used to buy real estate. Saixi Lake and No. 6 Taikoo Valley, the remaining 4 million Hong Kong dollars are used for the acquisition of land and old buildings); that is, there are still 1.27 million Hong Kong dollars in bottom-buying funds, which is not enough to distance itself from other real estate.

Take Cheung Kong as an example. Li Chaoren listed Cheung Kong in London and Toronto at the same time. From 1974 to 1975, he raised 1.8 million Hong Kong dollars from the stock market. In addition to bank loans, he had at least 3 million Hong Kong dollars in these two or three years. Hong Kong dollar bottom-hunting funds.

The management of Evergrande waited calmly for the boss's instructions, and the boss was still not satisfied with the 6 million Hong Kong dollars of bottom-hunting funds. It seems that the company's development will have a leapfrog growth this time.

Lin Rongheng said: "Qide Real Estate is a listed company. The company owns AIA and Kai Tak Building. The stock is only 1.05 Hong Kong dollars per share. The company's total share capital is 8000 million shares, and the market value is lower than the company's net assets. Go and talk to their boss Wang Zengxiang contacted about the merger; the merger plan can be 1 share of Evergrande Real Estate in exchange for 7 shares of Kai Tak Real Estate, or it can be purchased with 1.4 Hong Kong dollars per share in cash, we need to buy 48% of the shares.”

The current stock price of Evergrande Real Estate is 8.2 Hong Kong dollars per share, and its market value has also dropped to 8 million Hong Kong dollars, which is only one-eighth of the 60 billion Hong Kong dollars at the peak. At the peak, the stock price was 5 Hong Kong dollars (after the share exchange).At present, due to the public's distaste for stocks, the market value of companies in the market is basically lower than the company's asset value.

Lin Rongheng's proposal to acquire Kai Tak Real Estate was not a hostile takeover, because as far as he knew, Wang Zengxiang, the owner of Kai Tak Real Estate, had lost interest after the stock market crash and had the intention to sell the property.

Wang Zengxiang is in his 50s and was born in Taiwan. He is known as the first generation of rich people after the war. In the 50s, he became rich by speculating in real estate.Founded the listed company Kai Tak Real Estate, which is as famous as leading real estate developers such as Cheung Kong and Henderson. When it went public in 1972, Kai Tak Real Estate raised more than 8300 million Hong Kong dollars, which shows its strong strength.However, due to aggressive advances during the peak period of real estate, the entire Kai Tak Real Estate was in financial crisis after the stock market crash.

When He Rui heard this, he quickly said, "Boss, I'll go talk to Kai Tak Real Estate first!"

Lin Rongheng nodded and revealed: "I heard that their boss intends to release the listing, so this is our chance!"

good chance!
Everyone thinks so!
The best solution is naturally to exchange shares. At this time, Lin Rongheng is not worried about his shares being diluted, because not only because of his high shareholding, but also because the stock price in the market is very cheap, and he can increase his holdings at any time at a small cost.

And Evergrande Real Estate has increased its strength without spending a penny. This is the benefit of the capital game.

At this time, the laws of the Xiangjiang stock market are very lacking. When a company exceeds [-]% of the equity, it must propose a comprehensive acquisition from other shareholders; Shareholders of both parties, for browsing.. etc. "Company Acquisition and Merger Guidelines"; but these are just rules, not legally binding, giving people the feeling of a 'toothless tiger'.

(End of this chapter)