Hong Kong Island's New Rich Era

Chapter 161

Don’t underestimate Hong Kong. This small place is truly a place where hidden dragons and crouching tigers are lurking.

"That makes some sense, but it is also possible that Robert Kuok is preparing to transfer capital to Hong Kong. In recent years, many Chinese in Southeast Asia have been thinking about transferring capital here, and most people just buy some buildings or stocks."

Shen Bi thought for a moment and continued, "But Robert Kuok is worth so much that if he wants to come to Hong Kong, he must acquire a local company of considerable size. Maybe he has chosen a large hotel group."

In fact, Shen Bi's heart was also paused just now. Fak's analysis was not unreasonable. Analyzing Fak in this way was just a kind of self-comfort.

"That's possible, but the Kadoorie family has invested all its assets and energy in China Light and Power in recent years. They may not be able to control the hotel. We have to be on guard." Fak nodded.

"If Robert Kuok wants to acquire a big hotel, he may have to ask someone else." Shen Bi said with a smile.

"You mean, Liang Zhonghao?" Fake asked.

…………

Time quickly came to early August.

Half a month has passed since Robert Kuok officially made a public offer to acquire the Grand Hyatt Hotel.

During this period, the stock prices of large hotel groups sometimes soared to the sky and sometimes fell wildly, reaping the benefits of many hesitant small and medium-sized investors.

Both parties made large-scale acquisitions in the stock market, and news of this continued to spread in the Sihui market. Sometimes one party gave up, and sometimes one party had already held a certain amount of shares.

Since it was not officially announced, investors found it difficult to tell the truth from the false for a moment, making most investors hesitant.

At its craziest point, the hotel's stock price reached HK$58 per share, and at its lowest it was only HK$50 per share.

Because the current stock price is high, both Lawrence Kadoorie and Robert Kuok have given up on buying shares in the open market.

Instead, he uses his personal connections to try to persuade other shareholders to either sell their shares to him or promise other benefits in exchange for his support.

Liu Zhicheng had no idea about the specifics, and there was no need to ask. He was just waiting for an opportunity to increase his stake in China Power Holdings and convene an extraordinary shareholders' meeting.

In the Federal Building, Liu Zhicheng was discussing the plan to block China Power with Han Chunxi.

"Mr. Liu, we have recently raised another 4% of CLP shares from the open market, with the goal of holding a total of 31.3% of CLP shares (including the holdings of the US-owned Pacific Investment Company)." Han Chunxi reported.

"Well, that's right. What this means is that as long as we acquire at most 18.8% of the shares, we can have absolute control over China Power." Liu Zhicheng nodded and said.

"That's right, Mr. Liu, should I increase my fund-raising efforts next?" Han Chunxi continued to ask.

"You continue to buy shares at a low price." Liu Zhicheng looked at Yuan Tianfan again and said, "Tianfan, you must be prepared. You will represent me to enter Zhongdian when the time comes."

"Okay, please rest assured, Mr. Liu." Yuan Tianfan immediately expressed his opinion.

Han Chunxi couldn't help but look at Yuan Tianfan with some envy, and said: "Mr. Liu, there are not many circulating shares of China Power in the market at present, and it is already difficult to acquire them at a low price. Moreover, I am afraid that after China Power reacts, it will frantically absorb funds to protect itself. What should we do?"

"Don't worry about this. They have already taken the bait and are busy with the anti-takeover of the hotel." Liu Zhicheng said with a smile, "Just wait for my notification."

…………

A few days later in the morning, Robert Kuok came to the Federal Building again.

"Mr. Liu, I have good news for you. Liang Zhonghao is willing to sell half of his shares to me. In this way, my shares in the hotel will exceed 25%." As soon as Robert Kuok entered the door, he shared the good news with Liu Zhicheng.

"He still has 10% in his hands. Is he willing to vote for you at the shareholders' meeting?" Liu Zhicheng asked.

"He didn't want to because the Liang family had a good relationship with the Kadoorie family. At the beginning, he didn't even want to see me. It was only after I gave him certain benefits in Southeast Asia that he agreed to this equity transaction."

Robert Kuok shook his head and continued, "No matter what conditions I offered, he would only be willing to sell half of the shares. Otherwise, this acquisition would basically be a sure win."

"He probably doesn't want to put all his eggs in one basket. No matter what the future of Hong Kong will be like, they are still unwilling to withdraw completely," Liu Zhicheng analyzed.

As time moved towards the 80s, many Hong Kong citizens were considering whether to immigrate. For middle-class families in Hong Kong, this was just a choice between two options.

But for the super-rich, it is just a matter of asset allocation. Therefore, many experts in the past believed that the 80s was the golden age for investing in Hong Kong.

Of course, this problem does not exist for those who are thorough-going proletarians.

"No matter what, the shares of the hotel you hold already far exceed those of the Kadoorie family. Next, as long as your shares reach 34.9%, you will need to find a way to convene a shareholders' meeting and let all shareholders vote for you. Only then can the acquisition be considered a real success." Liu Zhicheng said after thinking for a while.

This is also the current policy that is very unfriendly to "hostile takeovers". The shareholding limit is triggered when it reaches 34.9%.

If you want to gain management rights of the company, you must bid for it or rely on voting at the shareholders' meeting. If the support rate exceeds half, you will naturally gain management rights of the company.

In addition, if you get the support of the board of directors, you can also obtain company management rights.

However, there is a practical problem in today's big hotels: the management is basically composed of foreigners, and it is difficult to get the support of the board of directors.

"I have been preparing for this for a long time. I have sent people to contact some shareholders and give them enough benefits so that they will vote for me when the time comes," said Robert Kuok.

"Besides buying back shares on the stock market, what has the Kadoorie family been doing recently?" asked Liu Zhicheng.

"Just like me, I am trying to convince various shareholders and hope to get their support. If I can acquire another 9.9% of the shares, and then get another 15% of the shares to support me, I can take over the hotel in one fell swoop. I believe that as long as the money is in place, there will be no difficulty." Robert Kuok said with a smile.

"That means you need to acquire another 10%. How do you plan to acquire it?" Liu Zhicheng asked.

"To cut the Gordian knot, I plan to buy it directly in the stock market tomorrow with cash at a high price, HK$70 per share, which will only require HK$5 million," said Robert Kuok.

"5 million? Isn't this price too high?" Liu Zhicheng frowned.

As expected of the richest man in Malaya, his generosity is like the heroic spirit of the charter king who bought Wharf Holdings in his previous life. "I can accept any price. The location of the Peninsula Hotel is excellent, and the Grand Hotel also has a large number of properties. It's a good deal if I buy it. What do you think, Mr. Liu?" said Robert Kuok.

"In recent years, the Hong Kong real estate market has risen sharply, but the Kadoorie family has been investing all its funds in the construction of China Light and Power's power transmission network. Therefore, the shares of the Grand Hotel, like Wharf Holdings in the past, are severely undervalued."

Liu Zhicheng thought for a moment and continued, "HK$70 per share is indeed a bit expensive now, but if you can acquire the entire company by acquiring 9.9%, it is still a good deal. The hotel also has several high-quality plots of land on Hong Kong Island, so you won't lose money in the future."

Although there will be a real estate crisis in 82 and land prices will be cut in half, as long as we can survive this period, we will usher in more than ten years of growth, which will be even crazier than the current bull market.

Moreover, many properties under the big hotels are in rare locations.

If they did not take advantage of the opportunity of Kadoorie selling off its shares in the Grand Hotel and building the China Electric Power Network, they would not necessarily be able to obtain these properties even during the real estate crisis in 1983.

"Mr. Liu, I got the news that Kadoorie didn't borrow much money from HSBC."

Robert Kuok nodded and continued slowly, "If I take action, the Kadoorie family may sell some CLP shares to increase cash. You must seize the opportunity then."

"Don't worry, no problem. I owe Mr. Guo a favor this time, and I will definitely repay it in the future." Liu Zhicheng said with a smile.

"Mr. Liu is very polite. After this acquisition, we will be able to get more cooperation from Mr. Liu, so that we can develop in Hong Kong together." Robert Kuok said with a smile.

Although Robert Kuok is a big shot in the Southeast Asian peninsula, the rules of the game are different in Hong Kong, the world's financial center.

If he wants to develop smoothly here, he still needs to cooperate more with large local companies. Only in this way can the return on investment be more guaranteed.

"This is not a problem. When my company has big plans in the future, I will invite Mr. Guo to participate." Liu Zhicheng said with a smile.

Liu Zhicheng has so many industries under his control. If he wants to achieve greater development, he can only gain a larger market by continuously attracting more partners.

If the company continues to be wholly-owned in the future, the entire global capital market will not allow this situation to occur.

If you are an unlisted company that is making a lot of money in a large market and capital cannot share the profits of this industry, then it will inevitably attract capital to support competitors to seize the market.

Since we have to share some of the results with others, in addition to giving them to some consortiums with resource backgrounds, the partners around us can also get a share.

Of course, these business partners mainly consider development in Hong Kong and Asia, and will still give priority to cooperation with their local consortiums in the European and American markets.

"Okay, after I complete the acquisition of the hotel, I will invest in Whampoa Group and Hutchison Whampoa." Robert Kuok said with a smile.

In order to stabilize Robert Kuok and prevent him from jumping out of the company at a critical moment, Liu Zhicheng decided to make greater promises to him, he said with a smile.

"Then let's get the hotel done first. I still have a certain amount of cash reserves. If Mr. Guo doesn't have enough funds for the acquisition, I can borrow some of it urgently."

"Thank you, Mr. Liu," said Robert Kuok.

"Mr. Guo, actually I have a project and would like to cooperate with you to develop the Chinese community in Malaya." Liu Zhicheng said slowly.

Robert Kuok drank the tea and motioned Liu Zhicheng to continue, as he knew it was a good thing.

"My Jingxi Electric Appliance Chain wants to explore the Malayan market with Mr. Guo. I wonder if Mr. Guo is interested?"

Robert Kuok thought for a moment, nodded and said, "Okay!"

The next day, Citibank once again made explosive news in Hong Kong's Sihui market. Its client, Shangri-La Hotel, purchased the hotel's shares in the Sihui market with cash at HK$70 per share until it acquired 34.9%.

As soon as the news came out, the share price of the Grand Hotel exceeded the acquisition price and reached 73 Hong Kong dollars, but soon fell back to 71 Hong Kong dollars.

Although the prices on the stock market were a bit higher, many investors still chose to lock in their profits and came to Citibank's office in Sihui Market to register for the sale.

Because there is a takeover war going on now, the stock price is naturally inflated. Once the takeover war is over, the stock price will naturally plummet.

Moreover, as Citibank announced at noon that it had acquired 27% of the shares of the Grand Hotel, it was getting closer and closer to the planned acquisition amount.

When the market opened in the afternoon, a long queue had already formed in front of Citibank's desk in Sihui Market.

The investors at the back of the line were a little impatient because no one knew how many shares the investors at the front of the line wanted to sell.

Once the acquirer has acquired enough shares, it will inevitably stop the acquisition unless it still wants to trigger a tender offer.

By then, no matter who continues to manage the hotel, the stock price will definitely plummet.

Of course, there are also greedy shareholders who are waiting and watching, waiting for the Kadoorie family to make a move, hoping to get a higher price.

Just as everyone was lining up, in a VIP room of the Xiangjiang Club, Lawrence Kadoorie looked through the glass at the queue below who were lining up to sell their own stocks, and veins on his hands were bulging with anger.

"70 Hong Kong dollars per share, this Robert Kuok is really a ruthless person." Lawrence Cardinal said with gritted teeth.

"Brother, if we don't take action and let things go on like this, we will definitely lose. Even Liang Zhonghao betrayed us and sold half of our shares to them." Horace Kadoorie said worriedly.

"I know that, but the funds are already very tight. Half of the 5 million Hong Kong dollars that I borrowed from HSBC has already been spent. You know the current stock market prices. If you want to raise funds in large quantities, you will need at least another 5 million Hong Kong dollars."

Lawrence Kadoorie frowned, sighed and continued, "In the past few years, our funds have been invested in CLP, and now we are facing an oil crisis. If we want to save the hotel, we can only sell some of CLP's shares to alleviate this crisis."

Horace Kadoorie shook his head and said, "That's absolutely not possible. Brother, have you ever thought about this? Now that the Grand Hotel has been acquired, it's hard for us to cope with it. But if we sell CLP shares, what if others attack CLP?"

"The scale of CLP is much larger than that of the big hotels. It is not something that ordinary capital can take over. Looking at the whole of Hong Kong, who has the ability to take over? Although there are powerful consortiums from other places, they basically look down on CLP. Moreover, we also have a powerful ally, Exxon Energy, so we don't have to worry too much." Lawrence Kadoorie said.

In fact, after Hutchison Whampoa was forcibly acquired by Liu Zhicheng, Hong Kong media gradually exposed Liu Zhicheng's overseas assets.

(End of this chapter)