Winning the new financial era

Chapter 502 During the Negotiation

In June, it was unbearably hot.

After two months of due diligence, hundreds of due diligence personnel finally reviewed all business revenues, product data, and even contract terms of Ruixiang and Zhonghe, clearing away the obstacles before the merger.

Although it is not as hard as moving bricks on the construction site, it is not easy to go anywhere, and each has its own tired method.

Fortunately, Bao Fan has a bald head, otherwise he would lose a lot of hair.

Ruixiang and Zhonghe together have dozens of application products, and the number of users is not tens of millions, or hundreds of millions.

The business also covers hundreds of countries, and there are research institutes and offices overseas.

There are quite a few companies that have participated in the shares. There are dozens of unicorn companies alone, and hundreds of other start-up companies with valuations of tens of millions or hundreds of millions.

In addition to Bao Fan's Huaxing Capital, three other well-known due diligence institutions participated.

The four parties worked together to make a big start to Ruixiang and Zhonghe.

Including scientific research results, laboratory technical personnel... various assets have been evaluated.

Although he often worked overtime until late at night, Bao Fan's enthusiasm remained undiminished.

After all, not everyone has the opportunity to participate in the largest merger and acquisition case in the history of China's Internet.

Huaxing Capital is going to be listed on the Hong Kong Stock Exchange soon, and it really needs this kind of awesome M&A case to increase its value.

The merger and acquisition teams of Ruixiang and Zhonghe Organization respectively read the due diligence reports of the other party and reviewed them one by one.

After confirming that everything was fine, the shareholder representatives of the two companies officially opened the final negotiations.

"Sharp's valuation of US$1000 billion is indeed a bit outrageous."

As the CEO of Zhonghe Group, Lu Qi participated in this negotiation on behalf of Zhonghe Group. His views were supported by a group of shareholders sitting beside him.

"Last year it was only 666 billion. In less than a year, it can increase by 50%?"

"This year's finances are not easy to do, and Ruixiang's business may be hit hard. It's not bad if the valuation is not lowered. Are you still thinking about a valuation of 1000 billion US dollars?"

"Come on, Ruixiang is not number one in every field, but our short video is the number one in the world."

……

A large number of shareholders in Zhonghe refuted and criticized, and Lin Zhenyang was not angry.

"Ruixiang had a revenue of more than 500 billion last year, and scientific research expenditure and technology investment exceeded 30 billion US dollars. Even so, we are still profitable."

Lin Zhenyang smiled and asked the shareholders of Zhongheyi: "What about Zhonghe? Did it have a revenue of more than 500 billion last year? What is the loss figure?"

Rui Xiang's shareholders watched all this with a smile, and gave Lin Zhenyang admiring looks.

Unlike Zhang Yida, Lin Zhenyang has no shares in Zhonghe and is in the same camp as their shareholders, so he was also selected as the main representative of the negotiating team.

"Current revenue and profitability cannot represent the future."

Lu Qi was very calm, and said with a smile: "Take Douvision as an example. A year ago, our monthly revenue was 3-4 million yuan, but now it has increased by 10 times, and our monthly revenue has exceeded 40 billion yuan.

Let’s talk about Pinduoduo again. It is expected that GMV this year will not be less than 5000 billion, and next year’s GMV will not be less than 1 trillion. The number of active buyers will exceed Goudong within this year.

Musical.ly is known as the most successful product in China, and the first software application with hundreds of millions of active users in the West.

In the game sector, we defeated Penguin and NetEase head-on, and defended our position as the world's number one chicken game.

Other sectors of big entertainment, such as long videos, music, novels, and movies, have also achieved good results.

From the perspective of business imagination, the valuation of Zhonghe Group should not be lower than 1500 billion US dollars. "

"$1500 million?"

The shareholders of Ruixiang were stunned for a moment, and then strong opposition erupted.

"Crazy about money? Who gave you the confidence?"

"The loss is so severe, if you can't raise funds, you will die."

"If Zhonghe has a valuation of 1500 billion U.S. dollars, then Ruixiang will have a valuation of 2000 billion U.S. dollars. After the merger, we can directly catch up with Ali and Penguin. Haha!"

……

Anyway, the shareholders of both parties kept talking, and the scene was like a vegetable market.

For mergers and acquisitions involving hundreds of billions of dollars, the shares of a point are worth billions of dollars.

In the face of such great interests, all self-cultivation and decency were thrown aside.

The shareholders on both sides refused to give in to each other, and both wanted to strive for more favorable merger conditions for themselves.

The higher the valuation of one's own side, the higher the proportion of shares in the new group, and no one is willing to give in easily.

From day to night, there has been no major breakthrough, and the situation has been deadlocked.

Bao Fan reported the situation to Zhang Yida who was on vacation in Australia.

It was rare for Zhang Yida to be free. To avoid suspicion, he did not participate in the negotiation between the two companies.

Because he was worried that he would not see live kangaroos next year, he and Zhao Erya came to Australia.

Later, I will go to Paris to see Notre Dame, and I am also worried that I will not be able to see it if I go late.

"Sharp to a valuation of 1000 billion U.S. dollars? Zhonghe's valuation of 1500 billion U.S. dollars?"

Zhang Yida felt that compared with these shareholders, he still seemed too sincere.

"If we continue talking like this, I'm afraid I will have to celebrate the New Year in Australia."

Bao Fan laughed, "It's not that exaggerated, you're asking for a lot of money, pay it back when you land!
Such a large transaction will definitely not be able to reach a consensus in a short period of time. "

"It's really not possible, only to bet against each other, and bet against each other is the best way to resolve valuation differences."

Bao Fan pondered for a while, and then said: "My suggestion to Ruixiang is to bet against profit, and my suggestion to Zhonghe is to bet against revenue..."

Zhang Yida heard Bao Fan explain all his thoughts, and said after a while, "It's best for both parties to participate in revenue betting. One makes a small profit, and the other loses a lot. What's the point of profit betting?"

Bao Fan had a headache, and Rui Xiang's group of people were not easy to fool, the key was that people would listen to what he had to say!
But since Zhang Yida had spoken, considering the underwriter qualifications, no matter how difficult it was, he could only follow through.

……

While Ruixiang and Zhonghe were negotiating, Leech Financial Services announced that it had completed a Pre-IPO round of financing of US$110 billion, with a post-investment valuation of US$1222.22 billion.

The huge financing of US$110 billion not only set a new record for a single round of global Internet financing, but also allowed Leech Financial Services to surpass Uber, which was valued at US$1200 billion, and took the crown of the world's most valuable unicorn.

As soon as the news came out, it caused heated discussions among countless netizens.

Some people ridicule that "BAT" has become "ATM", and some people think that when Leech Financial goes public, it is expected to break the record of the world's largest IPO financing of US$2014 billion set by Ahri on the New York Stock Exchange in 250.

Stimulated by this news, Ruixiang became more aggressive in negotiating with one party.

"Leech Financial is only valued at US$1222 billion, so why is Ruixiang worth US$1000 billion?"

Bao Zheyu does not think that Ruixiang can be compared with Leech Financial Services. Among other things, in terms of mobile payment market share in mainland China, Mobao Pay is only half of Alipay, and it is much lower than WeChat Pay. It can only rank No. [-] three.

(End of this chapter)