On the long banquet table, Gu Kun and De Solay sat at one end of the table, while their confidant lawyers and one financial staff member sat on both sides of the table.
After three drinks, the scene remained elegant, and Mr. Sorey gradually talked about the core interests of the issuance of new shares:
"As for the scale of private placement of new shares, the upper limit stipulated by Dutch securities law is no more than double the original share capital. In other words, before the capital increase, Gucci's current market value is more than 7 billion euros. After doubling the additional issuance, the total share capital will rise to
Market value 15 billion euros.
At the same time, the shareholding ratio of all previous owners will be reduced by half. Before issuing the privatization offer, Arnott held 36%. After the privatization offer, he swallowed up a considerable number of small shareholders, increasing it to 54%.
%.
As long as I successfully double the private placement, Arnott's shareholding ratio will be reduced to 27%. Our management team, as well as other small shareholders who always firmly support the management team, originally held a total of 32%, which will be reduced afterwards.
reduced to 16%.
And you Lanfang people, I remember that you secretly spent more than two years to get almost 14% of our equity, right? It should be just shy of the 15% line. After the private placement, this 14% is also
It will be divided by two to become 7%, but 50% of the newly issued shares are all yours, so your total shareholding afterwards is 57%.
However, the voting decision-making rights for the additional issuance must be delegated to the current management team. You only have 7% voting decision-making rights and 57% dividend rights/cash-out rights.”
The reason why Dutch securities law stipulates that "private placement" that "triggers the requirement to counter hostile takeovers" cannot exceed double the original share capital is because the actual need to regain control of the company has been fully considered.
Because it only needs to be issued twice at most, then the newly issued equity will be the same as the total of all previous equity shares, and everyone will pay 50:50. And the promoters cannot not occupy even a small proportion of the original equity, so the original equity
Divide by two and add 50%, it will definitely exceed 50%, and you can definitely regain control of the company.
If more private placements are allowed, it may harm the interests of other small shareholders and cause them to be highly diluted.
In fact, in many cases, even if this clause is triggered, most managers will not actually double the issuance, and can achieve the goal by spending slightly less money.
In contrast, Gu Kun was more concerned about how the funds injected after the private placement would be used, so he pointedly asked: "There is no problem with additional financing, and it is not non-negotiable that the new shares do not have full voting rights. However, the funds I injected
I always have a say in how it will be used, right? Otherwise, wouldn’t it be just for you to squander?”
Sorey nodded clearly: "As for the use of injected funds, of course you can participate in decision-making and allocation, and send people to supervise the whole process. In this regard, the voting immunity of preferred stocks is an exception."
Gu Kun: "So, you want me to invest 7 billion euros in one go for you?"
Solei made a final calculation carefully: "7 billion should not be used - the current market value of 7 billion was driven up by Arnott's previous premium privatization offer. If we help you find a suitable time to complete the additional issuance, it will be approximately
6 billion euros can complete all admissions.
And after the entry action is over, it won't take long for me to raise the total market value of the company after the capital increase to 15 billion euros, and I can guarantee it to you privately. This is also the biggest discount I can give you under the premise of a legal contract."
6 billion euros!
This is more than double the total amount of money Gu Kun invested in the luxury goods industry in the past two years.
(Note: During the 1998 Southeast Asian financial crisis, Gu Kun exchanged all the luxury industry shares with those Hong Kong financial companies during the cash-out activities after the Hong Kong stock market was protected. It only cost a few hundred million US dollars. Later, he invested additionally in George
Armani spent several hundred million more on these, adding up to more than 3 billion US dollars, equivalent to 3 billion euros)
But the benefits in exchange are also very obvious. After winning Gucci, Gu Kun will have the capital to challenge Kering Group. In the future, he is expected to compete for "who is the world's third largest luxury goods giant group".
As for the luxury industry's No. 1 lvmh Group and No. 2 Richemont Group, Gu Kun is still far from comparable. After all, his foundation is too shallow and he has only been in the industry for more than two years. He has made a name for himself in the industry by finding every opportunity to exploit every opportunity and crazy management.
The prestige, intimidation, showing muscles with every pull...
Being able to reach third place in the world is already an extremely incredible achievement.
Even if the status of Kering Group is blocked, it cannot be done immediately after acquiring Gucci. It will still take another two or three years to operate.
According to Gu Kun's estimation, if everything goes well, he will be able to carry on the competition until the end of 2002 or 2003, and he will be able to surpass Kering and Francois Pinault in the world.
Gu Kun wanted to get all of this.
He discussed in good faith: "I agree in principle, but is 6 billion euros a bit too much? We can also issue less, which is enough to squeeze Arnott out. You should be able to guess the reason why Arnott bought it."
The reason for Gucci's shares is that he feels he can control you. If he can't control you, he won't bother to stay as a small shareholder within Gucci.
So, once we win, you have to be mentally prepared that Arnott will sell out, and I have to leave some funds for that part of the equity at that time."
In fact, Gu Kun has enough funds, but he just wants to keep the price down. After all, it is 6 billion euros in real money. Even if Gu Kun is already a 40 billion US dollar rich man, he still has to save money if he can.
"Six billion euros is already a good deal. The money will not disappear after it comes in. It will still be used to expand the business. For you, it is just a change of place!" De Soret did not intend to give in on this issue.
In other words, he is confident,
"Moreover, let's make it clear - if you don't want to pay, Mr. Pino will be willing to pay. I have been half-promising and half-hearted with him for more than half a year. However, I am more optimistic about you in the long term!"
This kind of statement is not very polite. It is equivalent to saying "I have a spare tire" during a blind date.
The French are indeed not that stupid. If they are so easily deceived, how can they become the most powerful gold medal professional managers in the industry?
If Gu Kun wanted to refute, of course he had some leverage, but he thought about it and decided to use it sparingly.
Good steel is used in the blade, and he has a lot of bargaining points with Solei.
"Let's put aside the issue of 6 billion euros for now," Gu Kun adjusted the pace of the negotiation, "but I hope to be able to participate in the future decision-making of Gucci's product line preservation and disposal - not just how to spend these 6 billion euros.
Instead, I am allowed to cut down existing sub-projects and supervise the company to never waste money on certain projects. Of course, I will still not interfere with the company's daily operations."
De Solet's hand holding the coffee froze in the air, and after a while he snorted slightly: "Then you might as well talk to me about the 6 billion issue. Mr. Pinault would never make such a request, only Arnold
Only that bloody madman can.
Gu, when you were working with Giorgio Armani, the gentleness and non-interference in the designer's decision-making that you showed was all just an act."
Sorey's fierce reaction may be a bit baffling to a layperson. To understand this, one must learn about the most ruthless trick of Bernard Arnault, the world's number one luxury tycoon, lvmh, to get started.
.
In fact, in terms of capital, Arnott was originally inferior to the Richemont Group and the Rupert family of South Africa. Arnott was at best on par with Pinault, the boss of Kering, the third largest company in the world.
However, since the 1990s, Arnott's management skills have allowed him to gain a huge amount of growth space, which far exceeds that of his peers. The most vicious and effective trick he used was to "make hostile acquisitions of independent brands and slash them"
Kill uncompetitive product lines/business units, and then package and sell the cut off parts for cash.”
For example, Arnault first did this in the late 1980s and early 1990s to deal with Dior, which he purchased.
In the 1980s, Dior actually had a wide range of product lines. It not only made cosmetics, but was also famous for its clothing, bags and jewelry, but it was not as famous as Dior's cosmetics.
After Arnault acquired it, all the luggage, clothing and jewelry divisions that were to be split up and abandoned were all financially packaged, either through the stock market or through private equity financing, and were lost to suitors, leaving only Dior's most valuable assets.
Competitive high-quality assets.
If this strategy is used to run a separate luxury goods company, the effect will not be obvious, because no matter how small a mosquito is, it is still meat. After Dior cuts off its business except cosmetics, the turnover and total gross profit will eventually decrease.
But because Arnault has the big group lvmh in his hands, he is not afraid. After Dior focuses on making cosmetics, lvmh can let Givenchy do the women's clothing part that Dior has abandoned. Can lvmh let Givenchy do the bags that Dior has abandoned?
Let lv do it.
In other words, it is equivalent to the internal coordination of a large group, reducing the internal friction of competition between various sub-brands, and only focusing on the strongest project of each sub-brand to be the strongest.
For each subsidiary, such axed projects are detrimental to the subsidiary's own interests. But from the perspective of lvmh, a group company, this measure is a good thing to greatly reduce the cost of duplication and redundancy.
So, why don’t other colleagues do this?
That is to say, when Arnault keenly discovered that "the luxury goods industry can be formed into a group company holding a bunch of brand companies," others in the world had not thought of this path.
On the other hand, the luxury goods industry pays more attention to style and emotion. Many subsidiary CEOs like "the son of dysentery to be good for themselves" and are reluctant to cut off their flesh.
This also led to Arnott always being known as "the barbarian at the door of hostile takeovers" and unable to be a white knight.
As long as he controls a new subsidiary, he will cut it into pieces, cut off projects that are not of the highest quality, and fire people. Then which executive team will like such a bloody capitalist? He can only make a hostile takeover, and there is no other way.
Goodwill made the acquisition, and others didn't want to discuss it with him at all.
In the early 1990s, when Dior was completely overhauled by Arnault, it experienced a horrific history of "from bloody layoffs of 100,000 people to only 8,000 people left. Except for cosmetics, almost all other business departments were axed and packaged for resale."
of.
That was when Arnault falsely and coyly promised the French government at the time, "I won't lay off any people after I take control of Dior." But in fact, he still dared to go back on his word after taking control of Dior - he didn't even give the French government the face to urge him.
Commander-in-Chief Chirac even came out to appeal and asked him to pay attention to "social benefits", but Arnot was still reluctant.
No drug, no husband. Without his unique pioneering and decisive approach in this field, Arnott would not be the world's richest man in the future.
Therefore, when Gu Kun proposed to Solei now that he also wanted to "have the authority to participate in the decision-making on the future layout of the company's business divisions," Solei was so resistant.
He subconsciously thought that Gu Kun's "respectful feelings" attitude before was all a disguise of forbearance. In fact, Gu Kun was as bad as Arnott's bloody hand.