Chapter 692 [Battle of Xiangjiang Telecommunications 1]
London, Great Eastern Telegraph Office Headquarters.
Tai Tung Cable and Telegraph Corporation is a multinational company with more than 40,000 employees and operations in more than 70 countries and regions around the world. It holds 54% of Hong Kong Telecom's shares.
Hong Kong Telecom is one of the most important companies under Dadong. Its business includes fixed telephone networks and mobile phones, international calls, satellite communications, Internet access services and complete telecommunications systems.
Judging from the financial statements, Hong Kong Telecom's market value is about HK$200 billion, its profits are quite stable and healthy (annual profit is just over HK$10 billion), and its net assets per share are HK$3.18 (approximately 10 billion shares). In recent years, its earnings per share have always maintained
Around HK$1.
Hong Kong Telecom's stock price has been hovering around HK$20 for a long time. In other words, its price-to-earnings ratio (the so-called price-to-earnings ratio is the ratio of stock price to annual earnings) has been around 20 times for a long time (Hong Kong Telecom's shares are more than HK$20, and earnings per share are about HK$1).
.
Yuan Tianfan and Liang Botao, the old partners, once again worked together to take charge of New Era Group's acquisition of Hong Kong Telecom.
The two came to the headquarters of Dadong Telegraph Bureau. This was their third visit.
For the first time, the board of directors of Taitung Cable and Telegraph Bureau felt very sudden and had no preparations to sell Hong Kong Telecom, so no results were achieved;
The second time, the board of directors of the Dadong Telegraph Bureau had loosened its grip, and the two parties had tentative contacts, but there was no substantive negotiation result;
This was already the third meeting. Before the two left, their boss told them that if Dadong Cable and Telegraph Bureau still had no obvious intention to sell this time, he would temporarily cancel the acquisition plan and wait for Dadong Telegraph Bureau to change its board of directors.
Afterwards, continue contact.
Therefore, after the two came to the conference room of Dadong Telegraph Office, they carefully observed the situation.
Yuri, chairman of the board of directors of Dadong Cable and Telegraph Bureau, brought several directors with him this time. They immediately looked at each other and knew that Dadong Cable and Telegraph Bureau might be preparing to sell Hong Kong Telecom.
Of course, this is a huge acquisition, and there are countless twists and turns in the process, and the two of them do not dare to take it lightly.
At the beginning of the meeting, Yuri pretended to be hesitant and said: "Hong Kong Telecommunications is an important asset of Dadong Cable and Telegraph Bureau. We have made great efforts to develop Hong Kong Telecommunications over the years."
Yuan Tianfan and Liang Botao immediately cursed in their hearts. There is a bullshit effort to develop. The reason why Hong Kong Telecom is what it is today is because it has the franchise of "local calls" and "international calls" in Hong Kong, especially the franchise of "international calls".
, and it is the most profitable business.
To be honest, if the "international telephone" franchise was not about to expire ten years later, Cable and Telegraph might not have chosen to sell it; because they knew that, just like the "local telephone" franchise expired in 1995,
The Xiangjiang government immediately attracted competition from several telecommunications companies, so Xiangjiang Telecom will also face greater competition in the future.
Yuan Tianfan said seriously: "After all, Hong Kong is just a small place with millions of people, and the development potential of the telecommunications market is very limited. And Hong Kong Telecom has failed to develop its business in the mainland, and it already lacks the 'imagination' of the capital world.
A company without 'imagination' does not have much prospects. In addition, as the patent expiration date is approaching, it is more in line with Dadong Cable and Telegraph Bureau's own interests to cash out. Maybe it will make more money by investing in a more imaginative Internet!"
There is no other way. If you take the initiative to come to your door to buy something, you have to do some ideological work first.
As soon as Yuan Tianfan finished speaking, the directors of Dadong Telegraph Bureau all looked at each other with expressions of approval.
In the capital market, "imagination" seems to be more important than actual profitability. Although Hong Kong Telecom's actual profitability is not bad, the "imagination" it provides to the capital market is already very limited. In fact,
The stock price of Hong Kong Telecom has been hovering around HK$20 for a long time, which is the best evidence.
In the past, Hong Kong Telecom's status in Hong Kong was equivalent to that of China Telecom in China, enjoying exclusive operating rights. This was something that could provide "imagination" for the capital market. Now, this right has been deprived of it by the Hong Kong government through redemption.
.Now, there are as many as nine companies with telecommunications licenses in Hong Kong. Although Hong Kong Telecom is still the unshakable leader, it will inevitably be under the pressure of competition. In this way, its charm in the capital market will be greatly reduced.
The development potential of the Xiangjiang telecommunications market is very limited, and the development of mainland telecommunications business is a visible growth point. In this regard, Hong Kong Telecom has also made a lot of efforts: it has successively given concessions to China Telecom and China Telecom listed in Hong Kong.
Shares - Huaxia Telecom holds about 10% of Hong Kong Telecom's shares and is its second largest shareholder, hoping to get their help and open the door to China's telecom market.
However, the tough attitude of China Telecom's management department did not give Hong Kong Telecom a good result. Without the exclusive franchise and no room for continued development, Hong Kong Telecom lost its attractiveness in the capital market. In addition, after all, Dadong
It is a British company. After 1997, there are not many reasons to continue to stay in Hong Kong.
In fact, the board of directors of the British Cable and Telegraph Company had already begun to think about these reasons during the previous two meetings.
After thinking for a while, Yuri said, "I can convince the board of directors to agree to the sale. I wonder what conditions you can give me?"
Yes, the first step was successful, Yuan Tianfan and Liang Botao said in their hearts at the same time.
Yuan Tianfan said: "We can acquire the Hong Kong Telecom stocks in your hands according to the market value, which is 22 Hong Kong dollars per share, and the payment method will be half cash and half stocks."
In fact, this is also the result of Lin Zuhui's calculation. Because he guessed that the Hong Kong Hang Seng Index will only increase by at least 40 to 50% this year. Even if Xiangjiang Telecom continues to stagnate, it will not be a problem to increase by 20%, that is, the stock price is 26.5 yuan per share, and the market value is 2,650 yuan.
More than 100 million.
As for the stock issue, New Era Group is now three times the market value of Hong Kong Telecom. Even if it pays part of the stock, its holdings will not be diluted much. What's more, there are many opportunities to increase its holdings.
This chapter is not finished yet, please click on the next page to continue reading the exciting content! Yuri said decisively: "We will not accept the stock, and we are also very dissatisfied with your offer!"
Yuan Tianfan said: "For such a large acquisition, it is impossible not to pay for stocks, so we must pay half for stocks! As for the price issue, Hong Kong Telecom's stock price has been like this for a long time, which shows that it has no prospects in your hands, so
Our quote is reasonable.”
After a brief confrontation between the two parties, neither side was willing to give in.
Yuri smiled and said: "In that case, please ask your boss for instructions and then talk to us!"
The implication is that this is the end of today!
In fact, Yuri has already thought of a way, which is to introduce new competitors to increase the acquisition price and cash payment ratio.
Of course, Yuri took it for granted. Lin Zuhui had thought beforehand that there were almost no opponents who could compete with New Era Group.
Singapore Telecom?
With a market capitalization of only HK$200 billion, how much cash can it provide?
The New Era Group directly pays half in cash and half in stocks. This payment ratio is quite high.
Li Zekai’s dynamic?
Don't be kidding, Yingdong is still a child and has not even been listed on the market.
Even if this acquisition is delayed until the second half of the year, without the profit from Cyberport, how can the market value be increased to 60 billion?
Hutchison Whampoa?
No, British Telecom has not yet been sold, and Hutchison Whampoa is also in trouble; unless Li Chaoren shows determination, changes from his past "focus on cash flow and liabilities" and goes crazy, this will be possible.
Therefore, there are really no competitors at this time.
The most difficult part is to convince Taitung Cable and Telegraph Company to sell Hong Kong Telecom.
Yuan Tianfan said: "Well, let's say goodbye first!"
The two also knew that Dadong Telegraph Bureau would not easily hand over the chips in its hands, and New Era Group had not revealed its trump card, so there was no need to worry.
.......
Monday, January 4th.
On the first working day after New Year's Day, Lin Zuhui came to the headquarters of New Era Group in a very good mood. Although he was in a good mood, his body seemed a little weak. After three days of "9 shots" in a row, his iron body was also a bit overwhelmed.
Of course, his "emptiness" is not really empty, it can only be said to be "not in peak condition".
When he came to the office, Lin Zuhui read the newspaper and the computer leisurely.
In fact, Lin Zuhui doesn't have much work anymore. Even if he sits in the office and drinks tea every day, the company can develop steadily. Although he doesn't have a son to share the burden for him, his company has already become a professional manager.
Human system is more of a spiritual symbol. If you give some appropriate instructions, you can sit back and relax.
When his employees reached more than 200,000 (in all his companies), he could no longer manage the company's specific affairs personally, otherwise he would be busy to death.
In the morning, Liang Zhenxun came to Lin Zuhui's office.
"Boss, all European and American bank stocks have been cleared out, with a total of 45.8 billion Hong Kong dollars withdrawn, and the total return rate is about 430%."
Lin Zuhui said with satisfaction: "A very good rate of return! The highest one should be Citibank, right?"
Liang Zhenxun nodded and said: "Well, we spent 200 million US dollars back then, and this time we got back 3.02 billion US dollars, which is almost 15 times."
Over the years, Citibank has paid a lot of dividends and has also been buying Citibank shares. So in the end, after the merger of Citibank and Travelers, New Era Group still owned 1.52% of the shares. This year, Citibank's market value was around US$200 billion, making a profit
So much is natural.
】
Citibank's stock may still rise, but cashing out in advance is inevitable. After all, New Era Group needs to spend money.
Including Microsoft shares (1.5%) held by New Era Group, it will also be cashed out starting from July this year. If the cash is completed by the end of the year, it is expected to be worth 7 billion US dollars (55 billion Hong Kong dollars); there are also Vodafone stocks, which can also be cashed out for tens of billions of Hong Kong dollars.
above.
As for Sony's stock, you can choose to cash out another HK$30 billion after the new millennium.
The scale of stocks alone, together with this cash out, is 150 billion.
If we also include the sale of the British Telecom industry, I am afraid we will have to add another 80 billion.
The ‘extra’ cash flow of 230 billion can be regarded as the cash flow of the world’s top group, so the current market value of more than 600 billion is not an exaggeration at all. It can be said that the assets of New Era Group have been greatly underestimated.
There will definitely be no problem reaching 1 trillion by the end of the year. The Hang Seng Index was expected to increase by about 50% this year!
"How much cash does the company have on its books?"
"More than 65 billion!"
"Okay, this year we will continue to vigorously develop shipping, hotels, and shopping malls, and the acquisition of Hong Kong Telecom also requires cash flow."
"Okay, I will make financial arrangements."
When Liang Zhenxun heard this, he really wanted to ask: "As a major shareholder, don't you want to pay dividends?"
After all, companies like Henderson and Sun Hung Kai allocate a large proportion of their funds to pay dividends every year, but their own bosses are not very active in paying dividends.
In 1997, the profit was more than RMB 70 billion (the sales of properties and gold futures accounted for more than RMB 40 billion), and the dividend of New Era Group in early 1998 was less than RMB 8 billion.
It seems to be the company that pays the most dividends in Hong Kong, but in fact it only pays out just over 10% of its annual profits as dividends.
Last year's (1998) profit was estimated to be around 75 billion, and this year's dividend seems to be less than 10 billion.
Thinking of this, Liang Zhenxun actually understands that the boss is really not short of money. If he can make so much money for the company, he must also make a lot of money personally.
.......
Two days later, Yuan Tianfan and Liang Botao returned to Hong Kong to report the situation to Lin Zuhui.
After hearing about the attitude of Dadong Telegraph Bureau, Lin Zuhui was obviously thinking.
Hong Kong Telecom is a rich asset. Although in the previous life, after Li Zekai's acquisition, Yingke's market value plummeted from 500 billion to more than 20 billion; but in fact, after Hong Kong Telecom merged with Yingke, it was spun off after 2010, and its market value has remained
It fluctuates around 100 billion.
This chapter is not finished yet, please click on the next page to continue reading the exciting content! Overall, this deal was messed up by Li Zekai. If his father had not come forward, the merged PCCW would have only hundreds of billions of debt.
It can continue to be a drag. After all, the annual interest is tens of billions. So except for Hong Kong Telecom's profit, PCCW's other businesses have no profit at all.
So how can New Era Group profit from this transaction?
Soon, Lin Zuhui had a "capital market" plan in mind, but he did not say it out immediately.
"Well, since the Dadong Cable and Telegraph Bureau is already interested, they will definitely want to introduce competitors next, so we will wait and see what happens! Of course, if Hong Kong Telecom has a premium of 10% to 20%, we can also take action;
Moreover, more cash flow is not something that cannot be considered, after all, we can borrow a lot of money."
Yuan Tianfan and Liang Botao looked at each other, and then Yuan Tianfan said: "It is feasible to acquire an asset with a huge market value like Hong Kong Telecom at a premium of less than 10%."
He knows that the boss makes money, but he also spends money, so he reminds him.
Lin Zuhui said with a smile: "Having said that! Dadong Cable and Telegraph Company may drag it on. After all, the seller is taking the initiative now. And this year is the year of the Internet explosion, and the telecommunications industry is also rising, so I think Xiangjiang Telecom has risen to more than 260 billion.
The market value is entirely possible. Think about it, should we take the initiative to raise prices, or should we wait until later and be more passive?"
This is the benefit of knowing the general trend!
Assuming that Hong Kong Telecom's market value exceeds 260 billion in the second half of the year, the purchase price of each consortium will not be at a premium. After all, this is already too high, so that all consortiums participating in the bidding will be on the same starting line.
But if New Era Group is now willing to pay the price for the second half of the year, then other consortiums may not follow suit, and Dadong Cable and Telegraph Bureau will be more willing to accept the premium.
In fact, Dadong Telegraph Company will not be in a hurry to sell at a fair price. They will soon spread the word and introduce new competitors. Even so, they still take the initiative and can wait for the price and are not in a hurry to close the deal unless the price is very high.
satisfied.
When Yuan Tianfan and Liang Botao heard about this year's financial situation, there was no doubt that the boss was right when he said this year's market situation was this year. After all, this is a fact recognized by many people.
"Okay, we got it!"
Lin Zuhui added: "If this acquisition can be completed in one or two months, New Era Group can reduce the acquisition cost in the capital market, so you should pay attention to my opinion."
Although the two wanted to know what to do, after all, the first step of the acquisition had not been completed yet, so it was not easy to ask now.
Liang Botao said at this time: "Boss, if the cash ratio is increased, it will be very important to obtain official support from the mainland. First, Huaxia Telecom holds 10% of Hong Kong Telecom; second, Bank of China can provide loans."
Lin Zuhui said confidently: "They have no reason not to support it! Of course, it will depend on the situation later!"
"OK!"
In fact, Lin Zuhui also plans to use loans as the main source of funds for this acquisition, so banks will be able to provide loans by then. He plans to loan US$10 billion for this acquisition.
The entire New Era Group's group debt is only 20 billion Hong Kong dollars, which is indeed a very low debt for a group with assets worth nearly one trillion.
No way, I have cashed out a lot in the past few years, so that the cash flow is very sufficient.
If it weren't for such a large acquisition, there really would be no chance to increase debt!