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(Not home yet, will post later!)
In the conference room of a high-end hotel in San Francisco, people from all directions were sitting in distinct groups.
Ali's legal and financial teams sat on one side, and the professional investment teams brought by SoftBank, Yahoo, and Lam Capital also sat on each side.
Then, an interesting scene occurred on the field.
A group of blond foreign employees surrounded three Asian bosses.
Because they conduct business in the United States, Yahoo and Lam Capital all employ American employees, and SoftBank is no exception. It has branches in the United States and dispatches American teams nearby.
Son Zhengyi looked at Lin Fan, who was surrounded by three employees, and then at the six employees around him, wanting to make fun of him.
But after thinking about it, I realized that the dust has settled, and there is no need to engage in these little tricks to appear petty.
He turned to look at Ma Yun and said: "Jack, let's start!"
Ma Yun nodded towards Sun Zhengyi, stood up, glanced at the three-party investor team, and said confidently: "First of all, the ownership structure, Ali management holds 31%, Yahoo 26%, Lam Capital 23%, SoftBank
20%.
Do you have any objections to this item?"
All three investors nodded, indicating that this was passed.
Ma Yun continued: "Let's talk about SoftBank's share of Taobao, which is priced at US$360 million and will be acquired by Yahoo."
Ma Yun looked at Yang Zhiyuan and asked: "Is it okay?"
"no problem!"
Yang Zhiyuan nodded and smiled.
Jack Ma continued: "Yahoo China is priced at US$500 million. Do you have any objections?"
All three parties shook their heads and said they had no objections. This was the product of a compromise of interests.
Seeing the agreement on financing terms one by one, Jack Ma also sped up his speech and quickly reported the follow-up terms.
"...Ali's current external shareholders hold 33% of the shares. After friendly negotiation, the old shareholders are willing to transfer part of the shares at a discount. Based on the valuation of US$1.727 billion, the transaction price is US$570 million."
When Jack Ma said this, he paused, turned to glance at the three investors, and then continued: "After the equity transfer transaction was completed, Ahri continued to officially launch the D round of financing, with a pre-money valuation of US$2.74 billion.
!”
On the Yahoo side, a team member wondered: "Why is the gap so big? A billion dollars difference?"
Ma Yun smiled and looked at Yang Zhiyuan, who kicked the member under the table and signaled the latter to shut up.
This is actually the product of a compromise of interests.
First, it acquired Ahri’s old shares at a valuation lower than the market value of US$500 million. This was a blow to shareholders who were eager to cash out.
Then Ahri issued new shares at a valuation higher than the market value of US$500 million, which was a blow to two new shareholders, Yahoo and Lin Capital.
Because Yahoo Global took advantage of Yahoo China's valuation, it had to make certain sacrifices.
And because it is a listed company, all shareholders can foot the bill, and the loss shared on Yang Zhiyuan's personal head is not large.
Lin's Capital is all Lin Fan's personal funds, so it suffers a bit.
Of course, Jackma thought carefully and was afraid that Lin Fan would have any objections, so he went out of his way to comfort the latter: "Lin Fan, Lin's Capital has suffered a bit in this regard.
Therefore, you will acquire two-thirds of the 33% equity of external shareholders."
This would involve a lot of calculations, and Lin Fan could not quickly calculate whether he had made a profit or a loss.
He did not express his position for the time being and motioned for Jackma to continue speaking.
Ma Yun understood and continued to talk about the details of the transaction and the arrangements for all parties.
"Yahoo Global will inject Yahoo China and the Taobao equity acquired from SoftBank into Ali at a total price of US$860 million. In addition, it will also need to inject US$220 million in cash into Ali..."
Lin Fan listened carefully, not missing a single detail.praxi
In order for Yahoo to go from zero to holding 26% of Ali's shares, it needs to pay Yahoo China, which is valued at US$500 million, plus US$580 million in cash, and another US$360 million in cash will be used to acquire Taobao shares at a high price.
SoftBank spent US$60 million to invest in Taobao in February last year, and now it has recovered US$360 million. It also recovered the cost of its early investment in Ali.
All purchases will be paid by Yahoo stock investors!
However, it was none of his business and he did not express his opinion.
"Lin Capital invested US$392 million to acquire 22.67% of the equity held by external shareholders. In addition, it needs to inject another US$335 million into Ahli..."
Lin Fan quickly calculated his own investment, which totaled US$727 million, all in cash.
Yahoo holds three points more equity than itself, but its capital investment is US$353 million more.
However, Yahoo Global forced Yahoo China, which was valued at US$500 million, to enter the Ali system.
Who loses and who wins must be carefully calculated.
"SoftBank keeps its current 20% stake in Ali unchanged, but in order to prevent dilution, it needs to invest US$178 million to acquire 10.33% of external shareholders' equity..."
Jack Ma continued: “Before this round of financing, Ali’s pre-money valuation was US$2.74 billion, and its post-money valuation was US$4.155 billion.
A total of US$1.415 billion was raised, including US$860 million in assets and US$555 million in cash.
In addition, it also involves the transfer of old shares worth US$570 million.
Taken together, this series of transactions amounts to US$1.985 billion, which I think is enough to be called Series D of US$2 billion!"
After Ma Yun finished speaking with a smile, he looked at the crowd and found that everyone had their heads lowered in deep thought, and no one expressed an opinion.
"In this way, I will distribute the financing plan to everyone for verification."
Guessing that everyone might have been confused, Jack Ma quickly arranged for his employees to distribute documents to the three investors.
Lin Fan took the document and immediately handed it to the three members of the Liqiu Foundation next to him. They were responsible for calculating and weighing the gains and losses.
Yang Zhiyuan and Son Zhengyi were also the same. They called on their subordinates to start a brain competition.
Soon, an employee in his thirties with brown curly hair sitting next to Lin Fan spoke in a very low voice: "Lin Fan, we seem to be being treated as cheaters."
"Duck neck, please explain it more clearly."
The Lin Capital employee nicknamed "Duck Neck" is actually named Abel.
However, he has long been accustomed to his boss calling him the weird pronunciation "Duck neck ~ duck neck ~".
To this end, he also specifically asked friends who could speak Chinese for advice, and then...
Then he happily accepted the Chinese name given by his boss. The boss gave it to him and he did not dare to refuse!
With this nickname, or Chinese name, he got more opportunities to chat with Lin Fan, and he stood out from four colleagues and successfully gained the title of SVP Senior Vice President.
And the two colleagues beside him are still struggling in their positions as VP vice presidents.
It's so scary. Among the four employees of Liqiu Fund, except for the executive who stayed behind in the company, the other three are at the president level.
The four employees of Liqiu Fund were personally interviewed by Lin Fan, and they are all industry elites. They currently hold the position of vice president and work as analysts and investment managers at the lowest level.
However, Lin Fan promised that they would be allowed to recruit teams after a period of time. They would no longer be mere commanders, and everyone could lead a team.
Well, a group of three or four people.
The vice president is actually in an investment bank. This is the case in the fund industry. He is equivalent to a team manager or a small boss. In some companies with more ranks, he is a grassroots cadre, not even a middle-level executive.
In Goldman Sachs, it's even more exaggerated. They are senior salespeople.
Yabo handed the boss a piece of paper, which was densely filled with numbers and calculation formulas, as well as a few lines of notes.
After Lin Fan read it, his face quickly darkened.
Lin Fan was not the only one who was dissatisfied with the details of the transaction. Yang Zhiyuan's face was also as dark as the bottom of a pot.
"Jack, the holding cost of this 26% stake in Yahoo is as high as US$1.08 billion!"
Jerry Yang took the paper handed to him by his subordinate and read from it: "After the financing is completed, Ali's total share capital is 403 million shares, of which Yahoo holds 104.78 million shares, with a cost of US$10.31 per share;
Lam Capital holds 92.69 million shares, costing US$7.84 per share;
Excluding the old shares originally held by SoftBank, it accepted the transfer of 27.453 million shares from other old shareholders at a cost of US$6.5 per share.
Tell me, how do we accept this plan?"
Lin Fan glanced at Yabo's calculated results, which were all consistent with the numbers reported by Yang Zhiyuan at this time.
He also knew that the reason for the different average shareholding costs of the three investors was the transfer of old shares.
Ali's old shareholders hold 33% of the shares, with a corresponding number of shares of 87.7 million shares, a transaction consideration of US$570 million, and an average cost of US$6.5 per share.
SoftBank only bought a small part of the old shares and did not need to inject capital into Ahri, so the overall shareholding cost was the lowest among the three.
On his own side, he bought some cheap old stocks, and then injected some capital into Ahli at a high price.
One is high and the other is low, the two offset each other, and the shareholding cost ranks among SoftBank and Yahoo.
The biggest loser is Yahoo, because it did not take over Ari's old shares, and all of them were new shares issued at high prices, so the cost of holding shares is the highest.
Thinking of this, Lin Fan felt much more mentally balanced.
He didn't express his position easily, but Yang Zhiyuan kept getting angry.
Ma Yun was constantly questioned by Yang Zhiyuan, and kept smiling on his face.
After this plan was made, he knew that Yang Zhiyuan would definitely have a good fight with him.
But based on the actual situation, Yahoo Global has already taken advantage of Yahoo China's valuation. Naturally, it is impossible for Yahoo to take advantage for a second time. In this way, the other two investors will also be dissatisfied.
Therefore, in the transfer of Ahri's old shares, he divided it into three shares, two shares were given to Lam Capital and one share was given to SoftBank.
The share given to SoftBank was mainly to appease Son’s dissatisfaction.
The two shares given to Lin Capital were intended to help reduce the cost of holding shares.
Jack Ma thinks he is impartial and takes care of the interests of all parties.
After Jerry Yang finished getting angry, Jack Ma slowly replied: "Yahoo China invested nearly half of the US$1.08 billion invested by Yahoo, with a valuation of US$500 million.
If Yahoo China is excluded, Yahoo’s shareholding cost is actually not high.”
Jerry Yang naturally understood what Jack Ma was planning. To put it bluntly, he still felt that Yahoo China was not worth US$500 million.
Initially, Yahoo China was valued at US$700 million, but was reduced to US$500 million.
That's all, now Jack Ma still wants to lower the price.
This made Jerry Yang unable to bear it any longer and retorted: "Then lower Ahri's pre-money valuation by US$500 million."
Yahoo's valuation in China has been seriously undervalued, and so is Ahri.
As a result, Jerry Yang started harming each other.
SoftBank did not inject capital into Ahri and only bought old shares, which had nothing to do with them. Son just stood aside and watched the excitement.
Lin Fan was different. Yang Zhiyuan's proposal was also extremely beneficial to Lin Capital, so he began to support Yang Zhiyuan: "Yes, I think Ahri's valuation of 2.74 billion US dollars is indeed too high. 2.24 billion US dollars is about the same."
Ma Yunxian glanced at Lin Fan, his meaning was very clear, why did you come to join in the fun?
He felt that he had taken good care of Lin Capital's interests, but the other party was still not satisfied.
Lin Fan looked at Ma Yun's questioning eyes and began to tell his true purpose: "I think those 33% of old shares should be taken over by Lin Capital."
Sun Zhengyi is not happy anymore, he is going to take advantage of them!
The old man couldn't sit still anymore and joined the "melee".
For a large-scale transaction, all kinds of wrangling are inevitable.
In particular, Ahri's situation is more complicated, with entangled interests of all parties.
Lin Fan and his team have evaluated Yahoo China and believe that it is worth at most US$300 million.
In addition, Yahoo will also invest US$580 million, which adds up to US$880 million.
880 million U.S. dollars, in exchange for 26% of the equity, and the cost per point is 33.85 million U.S. dollars.
Lin Capital invested US$727 million in exchange for 23% of the equity, with a cost of US$31.61 million per point.
The difference between the two is actually not big. What makes him really unhappy is Son.
SoftBank got a big deal.
Faced with Lin Fan’s doubts, Son pointed out three fingers, “First, SoftBank has given up so much equity share, and everyone must compensate us;
Second, the cost of holding shares in Yahoo is very high, which indirectly damages SoftBank’s interests.
Third, the 27.453 million old shares we bought accounted for 10.33% of the total equity before financing and only 6.81% after dilution.
This is not much, because it seems that SoftBank only spent US$178 million in cash to obtain 20% of Ali's shares.
That’s because we currently hold 20% of Ali’s equity, and the US$178 million we spent is just to ensure that our equity will not be diluted.”
Masayoshi Son’s words were reasonable and well-founded, dispelling Jerry Yang’s idea of seeking losses from SoftBank.
So, Yang Zhiyuan turned to Lin Fan, "Mr. Lin, Lin Capital has taken over two-thirds of the old stock transfer share. You have made too much profit, so you should give us one-third."
Lin Fan immediately became furious. If one-third of the old shares were transferred to Yahoo, it meant that Lin Capital would have to participate in the issuance of new shares.
There is a valuation gap of US$1 billion.
The most ideal plan he had imagined was for Lam Capital to acquire 33% of the old shares and spend only US$570 million.
The 33% of old shares will still be diluted to about 22% after financing. If Lin Capital increases its stake in Ahli, the total capital used will be about US$600 million.
But everyone knows that the transfer share of old shares is a piece of fat, and they all want to take a bite.
Lin Fan still thinks he hasn't had enough to eat? Yahoo is coming to grab food?
So, he spoke up and started to choke Yang Zhiyuan.
The negotiation scene was very chaotic for a time.
Jerry Yang picked on Jack Ma, Lin Fan felt that SoftBank had taken advantage, and Masayoshi Son felt that his side had sacrificed a lot...
In short, everyone has his own reasons and wants to gain greater benefits for himself.
The negotiations lasted for three days, and finally an agreement was reached with the concession of Jack Ma's team.
Jack Ma’s team lowered Ali’s pre-money valuation from US$2.74 billion to US$2.5 billion.
Financing amounted to US$1.29 billion, including US$500 million for Yahoo China, US$360 million for Taobao equity, and US$430 million in cash.
The price paid by Yahoo: Yahoo China paid US$360 million to acquire SoftBank's Taobao equity, and it also needed to inject US$125.4 million in cash into Taobao.
Compared with the original plan, there are almost no changes, the only difference is the cash investment part.
The original required cash investment of US$220 million is now nearly US$100 million less.
And Yahoo still holds 26% of Ali's shares, and Jerry Yang is very satisfied with this.
SoftBank's plan remains unchanged from the previous one.
It still sold Taobao shares to Yahoo for US$360 million, and then SoftBank invested US$178 million to acquire 10.33% of the old shares, increasing its stake to 30.33%.
Ali's D round of financing will then issue new shares to Yahoo, Lam Capital, and SoftBank's 30.33% stake, which will be diluted again to 20%.
One increase and one decrease bring it back to its original shape.
Lin Capital needs to first invest US$392 million to acquire 22.67% of the old shares from external shareholders.
This is consistent with the previous plan.
However, the funds injected into Ali are more than US$30 million less than the previous plan.
Previously, it was necessary to inject another US$335 million in cash into Ahri, but now it has become US$304.6 million.
At the same time, the shareholding remains unchanged at 23%.
The harvest is not as big as Yahoo, but Lin Fan is basically satisfied.
