Start from 1980

Chapter 747 I have a plan

"Bold idea?" Su Chen carefully looked at the report she submitted.

After reading it carefully, Su Chen couldn't help but said, "It's really a bold and crazy idea."

Because she proposed to use leverage to acquire Swire Group.

Swire Group, the four old British capitals in Hong Kong.

Operating beverage, real estate, aviation, shipping and other businesses in China.

Many Chinese people have used their products. For example, most Coca-Cola in China is produced and operated by Swire Group. In addition, the later BJ Taikoo Li and Guangzhou Taikoo Hui are all assets of Swire.

Swire's parent company, British Swire Group, is headquartered in London. In addition to holding a 34% stake in Swire, it is also a series of holding companies with wholly-owned businesses, just like Shengshi.

These businesses include deep sea shipping, cold storage, road transport and agricultural activities with principal operations in Australia, Papua New Guinea, East Africa, Sri Lanka, the United States and the United Kingdom.

Now that Tang Wanru has set her sights on the Swire Group, this idea is really super bold.

Like Jardine Matheson, this Swire Group is also a company controlled by the British, and its largest shareholder is the British Swire family.

Most of Swire's core businesses are located in the Asia-Pacific region, with Hong Kong and mainland China as the main operating locations. Its business covers real estate, aviation, beverage and food chain, marine services, trade, etc.

Its assets in the Chinese market account for 85%, and the total market value of companies listed in Hong Kong alone is thousands of Hong Kong dollars.

As for the size of the non-listed company of the Taikoo family, even industry analysts are unclear. Some Hong Kong analysts once publicly stated: "The size of the huge Taikoo family is estimated to be clear only by the direct descendants of the family."

For example, Cathay Pacific Airways in Hong Kong is held 70% by Swire Pacific and 30% by HSBC.

In February this year, Swire Group and HSBC sold a 2% ​​stake in Cathay Pacific to Hong Kong CITIC Group for HK$23 billion.

CITIC became the third largest shareholder of Cathay Pacific, and Rong Zhijian and another CITIC executive joined the Cathay Pacific board of directors.

This is a Big Mac no less than Jardine.

At that time, Li Cucumber united with the shipping king and with the help of HSBC, defeated Wheelock and Hutchison in one fell swoop, while Shengshi killed Jardine in one fell swoop. Only Swire was left among the four major foreign companies, and it still stands today.

So, why the largest and most powerful Jardine has fallen, but Taikoo can still survive until now?
Different from the other three foreign firms, Taikoo has a characteristic that they do not have, that is, "not thinking about making progress".

The so-called "not thinking about making progress" refers to Taikoo's conservative behavior, and unless it is safe, it will not take action at will.

If the acquisition of Taikoo can be successfully acquired, it will surely resound the name of Prosperous Age throughout Hong Kong, and even the whole world.

But if it fails, the consequences cannot be underestimated.

The industry once commented on the four major foreign firms in Hong Kong: Jardine is the most aggressive, Hutchison is aggressive, Wheelock has frequent internal conflicts, and Swire is restrained and conservative, a typical example of working hard.

Take Swire Properties as an example.

This real estate company established in 1972, the first major project it did was Taikoo Shing in Hong Kong.

Taikoo Shing began its first phase of sales in 1976, and in just five years since then, the price has increased sixfold.

So far, Taikoo Shing has been more than ten years old, but the property prices can remain comparable to the surrounding new developments.

The case of leveraged mergers and acquisitions is not new. Now in the United States, such crazy operations are being staged everywhere, and there are also cases of leveraged mergers and acquisitions of companies worth more than 250 billion dollars.

Doing business has always been like this, starving the timid to death by starving the bold to death.

Tang Wanru's plan is to use Shengshi Venture to acquire the marathon sporting goods chain store under Swire, because this is currently the largest sports retail company in Hong Kong and Swire's assets.

The second step is for Shengshi Real Estate to acquire Swire real estate. Whether it is a real estate company with a large amount of land, a specialized infrastructure company, a property management company with a large number of properties, or a hotel management company, it is an acquisition by Shengshi. Target.

Another example is Cathay Pacific and other Swire assets.

In 85, businessmen Cao Guangbiao, Pao Yukang, Huo Yingdong, Chinese-funded institutions China Resources, and China Merchants formed a Hong Kong-Macau International Investment Co., Ltd., called Dragonair.

They hope to establish a localized airline with Chinese capital to compete with Cathay Pacific, a British company that has long been a monopoly.

It was established with a capital of 1 million Hong Kong dollars and began operations in July of the same year. However, in August of the same year, the Civil Aviation Department of the British Hong Kong Government revoked Dragonair's application on the grounds of the aircraft model.

They also asked Dragonair to provide proof that most of the shares are controlled by British nationals in order to obtain the qualification of the designated airline representing the UK under the Sino-British Airways Agreement.

Cathay Pacific has given no respite to its Chinese rivals at all.

"Leverage is just plan A, and plan B is that if the stock market crash you mentioned exists, I think we can buy the bottom at that time and pump water in the stock market first."

Tang Wanru said, "As long as the Shi Huaiya family can't withstand the stock market crash, our plan may succeed, and there is no need to use leveraged acquisitions. How does this idea compare to shorting US stocks?"

"It's more daring than shorting U.S. stocks."

Because $1000 billion seems like a lot, but in the U.S. stock market, which is often calculated in the trillions, this amount of money cannot cause waves and wind.

There are many incidents of retail investors bloodbathing Wall Street. If you look through the financial history of Wall Street, you can often see cases of various reckless heroes beating Wall Street giants.

In January 2021, young and fanatical American retail investors shouted YOLO ((you only live once, you only live once), and bought GME and other stocks collectively shorted by Wall Street hedge funds.

At the end of the story, the retail investors were completely reveling, while the Wall Street short sellers were "shivering".

After thinking about it for a long time, the short-selling plan in my head didn't have any major problems. Right now, I just need to wait until the stock market crash happens and control it myself.

"Follow the plan B you said, and pump water in the secondary stock market first." Su Chen said, "Also, I have a plan."

In fact, this is not the first contact between Shengshi and Swire. When Jardine was privatized, Shengshi had confronted Swire, Hutchison, and Wharf.

"Tell me." Tang Wanru nodded.

Su Chen pointed out that the statement she submitted contained the asset composition of Swire Pacific, a very detailed information.

Dao: "From the information you submitted, the parent company Swire Group holds 34% of the shares of Swire, which in turn holds 40% of Cathay Pacific, 32.8% of Hong Kong Aircraft Engineering, and Cathay holds HAECO. Engineering 27.4% stake.

Although it is a bit difficult to do, it is not impossible. "

"How?" Tang Wanru also became interested.

Su Chen said: "Because the Swire Group has only two core assets besides the real estate business, Swire Holdings and Cathay Pacific Airways, and Hong Kong Swire Holdings does not have a high shareholding ratio, so there is an opportunity to take advantage of.

If these two core assets are taken away, the Hong Kong Swire Group will be an empty shell, and it will collapse without a fight, and there is no need to deal with the Shi Yahuai family at all.

HSBC holds a [-]% stake in Cathay Pacific and is the company's second largest shareholder, which is the core key.

In order to obtain a controlling stake in Cathay Pacific, in addition to buying the scattered chips in the market, you must also acquire the equity of Cathay Pacific held by HSBC. If you can get it, this is the key to success.

Moreover, the most critical thing is to obtain the full support of CITIC Group and form an ally relationship to advance and retreat together.

If we obtain a controlling stake in Cathay Pacific, we can inject capital to dilute the equity of Swire Group, and firmly control Cathay Pacific and HAECO.

After all, Cathay Pacific only needs to own 27.4% of HAECO, which is 5.4% less than Swire Pacific, which is easy to buy in the market.

You help me make an appointment with Mr. Rong from CITIC, and I want to talk to him. "

Tang Wanru pondered for a while: "If we attack Cathay Pacific and HAECO at the same time, we will need a lot of funds, and we have just shorted US stocks, which will put too much pressure on the company's funds. Let me help you meet with Mr. Rong..."

(End of this chapter)