Return to 1958 and build a century-old giant

Chapter 822 China Gas Acquired
"Sure," Yang Wendong readily agreed.
Wall Street funds are different from normal companies; it is almost impossible for outsiders to buy shares in a fund.
Investors typically entrust their funds to fund companies, which then invest the funds. If the investment is profitable, the fund company takes a cut, usually 2-4%, depending on the investor's capabilities.

For example, at his peak, George Soros made $92 billion overnight by betting against the Bank of England in 10. After that, countless people rushed to send him money, so his commission was naturally much higher than 4%, or even more than half.
Of course, if you lose money, you can only accept your bad luck. You can't get your money back. That's the rule on Wall Street, and it's basically the same for funds in other places.
However, for the sake of long-term interests, most fund companies will not cheat investors, or at least not too badly. After all, investors are all important people, and if they mess things up, their reputation will be ruined, and they will lose all their clients in the industry.

Michael Milken chuckled, "Alright, when will your funds arrive?"

Yang Wendong thought for a moment and said, "I can give you 3000 million US dollars first, and the rest can be given at the beginning of next year, how about that?"

My current funds are mainly invested in the gold futures market. Small amounts of money are not a big problem, but mobilizing large amounts of funds is really difficult.

There aren't many investors in Milken, but investing in Chrysler requires a lot more money, and Chrysler urgently needs new capital injections; this money can't be delayed.

Therefore, he still needed to negotiate with banks such as Citibank and Goldman Sachs to obtain loans in his own name and then invest in these companies. This was because Chrysler was expected to receive $15 billion from Congress by the end of the year, which is why he needed to invest during the most critical time of 79. Otherwise, he might not have had this opportunity later.

At this time, he allowed Best Buy to raise funds for two reasons. First, it was a strategic need for Best Buy itself. Second, he considered that once many Wall Street companies recognized Best Buy's value, he could more easily use Best Buy's equity to obtain loans and then invest in Chrysler or other companies.

Of course, this is only a temporary difficulty. Once the funds from gold futures are returned, all the problems will be solved.

Furthermore, using bank funds for investment is a normal operation for capitalists. Only a fool would use their own money. It's better to keep your money in your own hands to avoid high-risk situations.

“Yes, but the returns wouldn’t be as good as a one-time injection,” Milken agreed.

Yang Wendong smiled and said, "No problem, I know."

Actually, a difference of a little over six months won't have too much of an impact. In terms of returns, investing in Milken is still not as good as investing in gold. However, this opportunity for gold only lasts for about a year, and he still needs to consider the future.
Milken said, "Okay, I'll prepare the contract here. After you review it and sign it, we can start working together."

“Okay, I’ll have my lawyer come over to negotiate,” Yang Wendong nodded.

Whether it's Best Buy's financing or this investment, or even Apple's previous financing, any contract requires cross-review by the company's legal department and a local top law firm before it can be approved;

On the one hand, while their own legal team includes international lawyers, their expertise cannot match that of the top-tier American law firms. On the other hand, it's about mitigating risk; if there are problems with the contract, they can also seek help from local law firms.
Even with knowledge of the future, many businesses are not without risks, such as product quality, political issues, and legal problems, all of which need to be avoided as much as possible.

A few more days passed, and the major Wall Street giants had completed their internal negotiations. Goldman Sachs, Lehman Brothers, Merrill Lynch, and Bear Stearns joined forces to purchase a 20% stake in Best Buy at a valuation of $15 billion.

Of course, this $15 billion valuation refers to the fact that before this investment, the four companies invested a total of $3.75 million to acquire a 20% stake. After the financing, Best Buy's valuation was $18.75 billion.
However, today's signing was just a memorandum of understanding. For such a large investment, just like their investment in Chrysler, the four consortia will conduct a financial due diligence first. Only after confirming that there are no problems will they inject funds. In other words, the transaction may take some time.

This is normal behavior; it's the same for any large investment.

However, with this memorandum of understanding, at least Best Buy's value has been recognized by Wall Street. As long as there is no financial fraud, Yang Wendong's assets in this company alone amount to as much as $15 billion.
Therefore, Yang Wendong also invited the head of Citibank's headquarters in New York City to discuss the loan. After all, he couldn't currently come up with the funds he planned to use to invest in Drexel Burnham Lambert and Chrysler, and could only rely on local banks.

The transaction involved hundreds of millions of dollars. After looking at the documents brought by Yang Wendong, Citibank CEO Walter Reston nodded and said, "Eric, your documents are fine. As long as this financing goes smoothly, I can lend you $5 million."
"But I'd like to confirm, are you really prepared to mortgage Best Buy's shares and then invest such a large sum of money in Chrysler?"

“Yes, I also want to take a gamble. The US government won’t let Chrysler go bankrupt, and the oil crisis can’t last forever,” Yang Wendong said with a smile.

After the defeat in Vietnam, many Americans believe that the U.S. military is no longer invincible, and the U.S. no longer wants to participate in large-scale wars, as it has been too damaging.
Therefore, many capitalists dare not say they have absolute confidence in the future situation.

Walter said, "Perhaps. The oil crisis may end, but oil prices may not come down and may remain the same as before?"

“If that’s the case, then I’ll be at a loss, but I believe that with the capabilities of the American auto industry, they will eventually be able to develop cars with low fuel consumption and low engine displacement; it just takes time,” Yang Wendong said with a shrug.

That's not entirely untrue; American cars will indeed be more fuel-efficient in the future. However, they still can't compete with Japanese cars, since Japan has invested in this area for decades, and it won't be easy for the Americans to catch up.
Another point is that the extreme fuel efficiency of Japanese cars comes at the cost of a certain level of safety. Anyone who has driven American and Japanese cars in their past life should be aware of this.

Therefore, American cars are not entirely without merit; at least in the short term, they can still be a viable option for a considerable period. Another major reason for the decline of American cars is the labor union system.
Of course, this has nothing to do with Yang Wendong; he will cash out and leave in a few years.

“Eric, you seem to have more faith in American cars than we Americans do? Haha, why don’t you try acquiring an American car company for fun?” Walter said with a laugh.

Yang Wendong shook his head and said, "Forget it, I'm willing to invest, but operating in the automotive industry is a different matter. I won't consider that for now."

The automotive industry, especially the gasoline-powered vehicle industry, is an absolute capital-intensive industry, even more so than the steel industry. It is also extremely technically challenging and requires the cooperation and management of numerous suppliers.
The American auto industry is definitely declining, and with the power of labor unions, he has no desire to get involved.

Comparatively speaking, the British are much better. He also has his eye on other British or European car companies, although the unions there are not to be trifled with, but they are better than those in the United States.
At the very least, once Thatcher comes to power, he will have political capital behind him in Britain. Thatcher also wants to privatize state-owned enterprises, which aligns with her goals, and she will also suppress British trade unions.

In the United States, his political foundation is too weak, and even if he were to acquire a car company, he would face endless troubles.
Of course, it's not feasible now, but perhaps it can be considered in a few years. Both funding and political resources are subject to change. In the coming years, he will heavily invest in the US, and with industrial development, he will gain sufficient resources and connections. Everything will have to wait until later, at least until gold returns stabilize. It's definitely not something I'm considering this year; I'll just stick to simple investment.

“Alright then, as long as you're sure you'll use Best Buy's shares as collateral, I can consider this loan,” Walter said. “However, it still needs board approval, and it's a very large sum.”

Even for a bank of Citibank's size, an additional $5 million in bad debts would be a devastating blow.
Although Best Buy has been recognized by major Wall Street investors, it is not yet publicly listed. He believes that the risks are not significant, but there are still some.

Yang Wendong said, "That's natural, but I hope your bank can complete this process as quickly as possible, because I will also be applying for loans from Wells Fargo, JPMorgan Chase, and Bank of America at the same time. However, I still hope to cooperate with Citibank, after all, we have been cooperating for many years."

Lending is also a business, so naturally it won't be limited to just one bank.

Choose the bank with the lowest interest rate and the best terms.
“Eric, don’t worry, you’re a long-time customer of our bank. I will definitely provide you with the lowest interest rate and the fastest service,” Walter said quickly.

In fact, he also believed that there was little risk in this loan. The rise of the electronics industry was already a consensus in the United States, and Best Buy controlled one link in the chain, so it was basically a sure thing.

Furthermore, Yang Wendong also owns KFC and Red Bull in the United States, as well as a large amount of real estate and industrial assets overseas. Even if his investment in Chrysler fails, he will not default on the money. Otherwise, his global business reputation would be completely ruined, which would be a huge loss.

Yang Wendong nodded and said, "Okay, I'm about to return to Hong Kong. I hope to receive your good news soon."

Best Buy, Chrysler, and Citibank are all involved in large transactions of hundreds of millions of dollars. All parties would be cautious and would need at least a month or two to review and go through the procedures. Naturally, he could not stay in the United States indefinitely.
Once all three are settled, he can come to the United States again.

After all, while the US market is important, its core foundation is still in Hong Kong and Asia, and it needs to go back there first.
Anyway, with a private jet, it's convenient to travel to and from Europe and America. When I have the opportunity in the future, I'll buy a Boeing 747. On the one hand, it's more comfortable, and on the other hand, it can fly directly across continents. This way, I can save at least half a day for each flight, and the total time saved over a year will be quite a lot.
On March 26, Yang Wendong returned to Hong Kong;

After a day of rest, Yang Wendong arrived at his office in the Kang Le Building, where Fang Xianming was the first to arrive: "Mr. Yang, I have already acquired 24% of the shares of China Gas."

"So fast?" Yang Wendong asked in surprise.

The original plan was to acquire 30% of the company within two months, but unexpectedly, it has already been more than halfway done in just one month.

Fang Xianming laughed and said, "Yes, while I promote the power grid company through the media, I can also point out the decline of Hong Kong and China Gas. At the same time, some stock market commentators have also been bribed by us to unanimously express their pessimism about Hong Kong and China Gas."
So when Hong Kong and China Gas's stock price plummeted recently, I took the opportunity to arrange for a large number of accounts to accumulate shares. However, unexpectedly, some shareholders who already held a certain number of shares also became bearish on Hong Kong and China Gas and sold their shares, which made our acquisition much easier.

"It seems the British guys behind China Gas are also thinking of getting rid of it," Yang Wendong nodded and said.
Historically, Li Ka-shing successfully acquired Hong Kong and China Gas without launching any takeover battle, indicating that the process was a smooth handover. This suggests that the existing British-owned controlling family also intends to divest or even leave Hong Kong.

Fang Xianming said, "Yes, so I plan to confront their family directly. If they agree, I can buy their shares at a high price, which will also benefit them."
If they disagree, there are only a few percentage points left. We can just raise the price a bit through a public tender.

"Okay, go ahead and make the contact," Yang Wendong agreed.
Although he is optimistic about the future of the coal and natural gas business, for now, Hong Kong and China Gas is still a small company and does not require his personal involvement.

A few days later, Fang Xianming sat facing a foreigner.

"Mr. Dudley, what do you think of our suggestion?" Fang Xianming asked with a smile;

The person before me is John Dudway, a descendant of the Dudway family, the founding family of Hong Kong and China Gas.

John Dudley asked with some surprise, "You already own 24% of the stock?"

“Of course, you can investigate that. Besides, the 20% of shares held by Li Zhaoji are also on my side.” Fang Xianming said with a faint smile, “Mr. Du Dewei, I think you should know what I mean.”

“Haha, I understand.” John Dudley sighed and said, “You want to buy all the stock I own?”

Fang Xianming said, "Yes, you have about 21% of the shares. I want to acquire them all. The price is negotiable. This way, you can cash out quickly. I heard that your family is also planning to move back to England."

The question of Hong Kong's future ownership has become a hot topic in Hong Kong society. Many British businessmen are worried and are thinking about withdrawing their investments, while some Chinese are even thinking about fleeing.

Smaller capital can simply cash out and leave, but it's less convenient for larger capital, although it's a gradual process. For example, Wheelock began buying ships on a large scale, believing that ships are a form of asset. Many Chinese shipping magnates actually thought the same way.
John Dudley said, “Okay, but I have one condition: I don’t want Hong Kong dollars, I want British pounds or US dollars.”

“Okay, no problem.” Fang Xianming readily agreed, as he was capable of making decisions on such a small matter.

PS: Please give me a monthly ticket
(End of this chapter)