"Let's talk about the topic. Through Goldman Sachs, Red Hat has shown interest in acquiring the equity of Playboy Group. After several rounds of preliminary contacts and soliciting opinions from all parties, I feel it is necessary to sit down and talk.
Let’s talk.”
Mr. Merck introduced everyone present in detail;
"Mr. Pierce, chairman and major shareholder of British Trust and Savings Bank, is the second-ranked shareholder of the Playboy Group. He holds a 17% interest in the company's real estate nightclubs and other properties, and a 22% interest in the Playboy brand.
Mr. Madoff, chairman of the Madoff Company, participated in private closed-door negotiations on behalf of small and medium-sized investors who hold a 36% interest in Playboy Group Properties and a 31% interest in the Playboy brand.
Ms. Christie Hefner, on behalf of the group’s founder Hugh Hefner, holds 41% of the Playboy Group’s properties, 35% of the Playboy brand, and 100% of the Playboy magazine.”
After listening to the introduction, Ms. Christie Hefner first stated;
"According to my father's wishes, Playboy magazine is his passion and is not for sale. We can only talk about the other two asset acquisitions."
As soon as this statement came out, the other two major shareholder representatives caused an uproar, and their faces suddenly darkened.
They are worried that this will affect the perception of Red Hat and reduce the value of other properties, which will have a great negative impact on the proposed merger and disrupt the acquisition.
"Ms. Christie has not mentioned this matter in previous contacts. I think the board of directors should have an explanation for this. What will our partners think?"
"Strong opposition will make the Playboy Group less attractive, severely reduce its valuation, and harm the rights and interests of other shareholders."
"I think this should require a vote by the board of directors rather than making such an irrational decision without permission."
"agree."
Ms. Christie Hefner leisurely sipped champagne, turning a blind eye to the anger of the company's two major shareholders, and even disdained to refute.
The entire Playboy Group's asset basket consists of three assets: real estate and nightclub properties, the Playboy brand and Playboy magazine, with a total value of approximately US$800 million.
Among them, "Playboy" magazine is 100% owned by founder Hugh Hefner, and it has absolute authority that no one else can dispute!
"Gentlemen, let's calm down."
As an experienced M&A consultant, Mr. Merck, a partner at Goldman Sachs, is very familiar with this scenario. There is no merger and acquisition that is not caused by a conflict of interests, which requires a clever M&A consultant to act as a peacemaker.
Eliminating differences, seeking common ground while reserving differences, and jointly promoting the smooth progress of mergers and acquisitions are the basic skills of investment bank managers.
"Ms. Christie, is it possible that Mr. Hugh Hefner will back down from his position?"
After receiving a clear answer, Mr. Merck spread his hands to the gloomy-looking Mr. Pierce and Mr. Madoff and said;
"We cannot influence Mr. Hefner's position, which means that in order to complete the deal, the company's shareholders must make concessions and re-evaluate the company's valuation.
Without "Playboy" magazine, the group's properties are just an ordinary real estate transaction. Stripping away the brand premium, it can only be calculated based on market valuation. Although this is a bit cruel, it is the fact.
By the same token, without the golden halo of Playboy magazine, the valuation of the Playboy brand will also shrink. I hope you will be cautious in your bids."
As soon as these words came out, the room fell into an awkward silence.
a moment later
After a private exchange of opinions, Mr. Madoff said in a dry tone: "We can agree to reduce the value by 1/5. You know, Playboy magazine continues to lose money and is not a good asset. This is already the biggest concession.
.”
Wang Yaocheng drank champagne leisurely and had no intention of talking at all.
As a corporate mergers and acquisitions consultant, Goldman Sachs naturally handles these tense negotiations.
There is no need for Wang Yaocheng to go into battle shirtless, he only needs to give his final nod and agree, and then sign the contract, and it's done.
"hey-hey……"
Mr. Merck is not easy to deal with. He will definitely make the other party feel heartbroken when he wields a knife to bargain. It has the miraculous effect of killing without blood.
"I'm afraid Mr. Madoff has forgotten what the Playboy Corporation was built on?
"Playboy" magazine is the foundation of the group. Its huge influence extends to all parts of Europe and the United States. It has a direct influence on the Playboy brand. Whether it is profitable or not can be simply summarized.
"Playboy" magazine introduces fashion, sports, food, and consumption, leads European and American social fashion, represents the trend in the high-end consumer field, and has huge influence in many fields.
There are also columns such as celebrity interviews and news and current affairs commentary. Celebrities interviewed include Martin Luther King, John Lennon, and Steve Jobs, who have huge influence on society.
The annual golf tournament held has world-class influence, and the classic brand image of the bunny girl is one of the American cultures.
All funds spent are to establish the luxury brand image of "Playboy" magazine. The necessary capital expenditures must not be measured by whether "Playboy" magazine loses money or not.
If Playboy magazine is divested, the remaining assets will be greatly bleak, and even the Playboy brand will lose a lot of value, which cannot be represented by a 1/5 impairment."
Having vaccinated the three major shareholders in advance, Mr. Merck said slowly and clearly;
"In view of this situation, Goldman Sachs has a very professional assessment by financial professionals. The Playboy Group has divested Playboy magazine and the remaining assets have been devalued by 45%. We can negotiate on this basis.
PricewaterhouseCoopers can issue a professional appraisal report, including both property and brand assets, with a current value of approximately US$440 million.
Among them, including the Playboy Building on Sunset Boulevard, 27 nightclubs across the United States, and offices in the United Kingdom, the total value of properties in various locations is US$277 million, and the Playboy brand value is US$163 million, totaling US$440 million.”
This is a real killing without blood. There is no bargaining. All arguments are based on rigorous accounting and auditing. 45% is cut off with one blow. It is not cruel.
The key is that everything said is well-founded and irrefutable.
If you act like a village woman during the negotiation, no one will care about this poor performance, and the investor will leave immediately.
With a lot of cash in hand, are you still worried about not finding investment targets?
Goldman Sachs' trump card was laid out, causing Ms. Christie, Mr. Pierce and Mr. Madoff to look at each other as if they were hit in the head with a sap, leaving them speechless for a long time.
In the end, it was Ms. Christie who said, "We cannot accept such a huge difference in valuation. The cost of purchasing and operating the property alone is as high as US$422 million, which is almost a 50% impairment. This makes it difficult for us to explain."
.”
"Madam, and two gentlemen, I would like to draw your attention.
The current harsh market environment is such that any negotiation that is divorced from the actual market environment is unprofessional.
Since the wave of investment in real estate in the United States by small books has passed, the real estate market in the United States has ebbed in a big way, and a large number of fixed assets have been sold at a huge loss to fill the growing hole.
The real estate market in the United States has been greatly affected, with an average decline of 45%. If you want to find such a strong enemy, who else can you look around the world?
According to estimates by market participants, this round of real estate bear market has not yet reached its bottom, and it will take at least three years to ease. Looking at the problem divorced from reality is not the right attitude."
Mr. Merck responded with reason and evidence. The current real estate market situation is so bad that it is irrefutable.
The scene fell into awkward silence again...
The three major shareholders were silent for a long time, and their expressions showed extreme struggle. The decision to cut off the flesh was too difficult to make, and it would be a huge pain for everyone.
"Okay, thank you Mr. Merck for your professional M&A advisory opinion. I can feel the pain in the hearts of the three of you. Then we will abandon this issue for the time being."
Wang Yaocheng suddenly said something.
This made Mr. Merck stunned and asked, "Boss King, what do you mean?"
"Yes, I gave up the acquisition of Playboy Group properties. You don't need to waste time on this anymore. Let's talk about the last transfer of the Playboy brand. To be honest, I have little interest in this light industry. If you all
If you are willing to keep it, then keep it."
"Uh...okay."
Regarding Wang Yaocheng's sudden statement and categorically giving up the acquisition of real estate assets, the three major shareholders of Playboy Group felt their hearts sinking and secretly thought;
Worse...
Due to the more explicit and cheaper prices of the same type of erotic magazines, as well as the impact of the erotic video tape market, the sales volume of "Playboy" magazine dropped sharply, and the Playboy Group Company was in trouble, with continuous losses of tens of millions of pounds in consecutive years.
In addition to the economic downturn, properties purchased during the boom period are burdened with heavy personnel expenses and brand promotion costs, which are like a broken ship that is leaking everywhere and difficult to recover from.
It was difficult to find an interested major, but the founder of the group, Mr. Hugh Hefner, was unwilling to sell Playboy magazine, which was equivalent to taking away the soul and brand aura of the group.
Faced with Goldman Sachs' fierce price reduction, the three major shareholders were unwilling to vomit blood to sell properties and heavy assets.
This time, investor Wang Yaocheng was really dissatisfied and directly vetoed the property asset transaction.
The only deal left on the shelf now is brand licensing. If it is rejected again, this acquisition transaction will be declared obsolete and will surely arouse the resentment of Goldman Sachs.
It will not be easy to sell assets in the future. Your attitude during negotiations is neither correct nor professional. Who would want to play with you?
From Wang Yaocheng’s perspective;
"Playboy" magazine and group company properties are not what he is interested in. He is not willing to run nightclubs and real estate properties. He regards Mr. Hugh Hefner as a treasure, and he has no love for "Playboy" magazine, a symbol of American culture.
.
It's an erotic magazine. If you can, don't touch it.
The only target I'm interested in is the Playboy brand. I'm lucky if I get it, but I'm lucky if I lose it. I don't have a strong will to win it.
This affordable luxury brand represents tens of billions of wealth. The brand authorization alone can make you feel full, and it is a very cost-effective investment.
The opportunity for the Playboy brand to regain a new lease of life lies in the mainland market in a few years, but now there is no hope at all.
"Ahem, now that the boss has made an irreversible decision, let's talk about the Playboy brand again."
"Ahem, let me interject." Wang Yaocheng coughed twice after Mr. Merck said, "I came with sincerity and a check. I hope to resolve this merger quickly. The party is not over yet, and there is still time and
Let’s chat with other friends. Citibank has given me a credit line of 1 billion US dollars. As long as the transaction is completed, I can write checks at any time. If the amount is not large, the cash on hand is enough to cope with it. I’m done.”
As soon as these words came out, everyone present looked at Wang Yaocheng's youthful and sunny face with envy and hatred;
This rich man is so inhumane.
He can sign checks for less than 1 billion US dollars at any time. He is so arrogant and arrogant to the point that he has no friends.