Chapter 186 Li Changhe is so cruel!

"I do want to acquire Hutchison Whampoa, but I also need Mr. Bao's help. Without Mr. Bao's help, it would be difficult for me to acquire Hutchison Whampoa."

Li Changhe said seriously at this moment.

When Bao Yu heard what Li Changhe said, an expression of as expected appeared on his face.

But then, he asked Li Changhe with some doubt: "Jardine Matheson is not Wharf Holdings. Jardine Matheson's control over Jardine Matheson is much greater than Wharf Holdings."

“Are you sure you want to buy the land?”

“I think there’s a chance!”

"Oh? Tell me about it. If your plan is indeed promising, I can help you!"

“Also, sometimes you don’t have to equate Jardine Matheson with British capital. As far as I know, HSBC’s attitude towards Jardine Matheson is very average.”

"Although they are all British companies, it doesn't mean they are all the same. Sometimes, business and politics are not closely related."

"Shen Bi doesn't want to keep cleaning up their mess."

Bao Yugang spoke meaningfully to Li Changhe at this time.

Li Changhe came to his senses immediately after hearing this.

Yes, if the British government had not intervened, HSBC would not necessarily have helped Jardine Matheson.

The most important thing is that these companies often expand disorderly, blindly acquiring and acquiring without considering the consequences.

Just like Hutchison Whampoa, the Qi Dezun family was frantically acquiring companies, but they did not have sufficient market management capabilities. In the end, hundreds of companies under Hutchison were all heavily in debt.

Qi Dezun threw up his hands and said, "I quit," and handed the pledged shares to HSBC. As a bank, HSBC had to step in to find the operator and sort out Hutchison Whampoa.

As a bank, not only did the loans it lent out become bad debts, but HSBC also had to pay salaries to Hutchison Whampoa's executives every year to keep the company afloat and ensure its market value. Otherwise, once Hutchison Whampoa went bankrupt, HSBC's loans would be completely wasted.

This is a disgrace to the banking industry if it is made public.

So Li Changhe now suddenly understood why Hutchison Whampoa and Pao Yu-kong were fighting, and why HSBC decisively supported Pao Yu-kong.

Perhaps in the eyes of HSBC and Stephen Simpson, Pao Yu-kong has already proven his management ability, and supporting Pao Yu-kong to take over Wharf Holdings is a strong achievement for HSBC. After all, loans require interest.

But if we support Jardine Matheson, with their rotten state, they can't even beat Li Ka-shing. Even if we save Hutchison Whampoa, it will still be in trouble in the future.

The most important thing is, what if they suddenly go bankrupt like Hutchison Whampoa? Will HSBC have another bad debt?
After all, for banks, lending is their real job, not cleaning up the mess for British companies.

If this is Shen Bi's idea, then Li Changhe feels that his chances of success may be higher.

"In fact, I discovered this opportunity through a previous report."

"Report?"

"Yes, it was the Milk War that broke out seven years ago!"

Li Changhe said to Bao Yugang with a smile, and Bao Yugang reacted immediately.

The milk war refers to the battle for Hong Kong Land to acquire the equity of the dairy company.

The Dairy Farm Company later became Dairy Farm International. In 1972, it did not belong to the Hong Kong Land Development Company, but to another Chinese tycoon, Zhou Xinian.

Like Bao Yugang, Zhou Xinian was also a wealthy Chinese. He had strong connections with the British Hong Kong government and was one of the wealthy Chinese supported by the British Hong Kong government.

The famous Hong Kong Sanatorium and Hospital in Hong Kong is his property.

At that time, Dairy Farm was the leading retail company in Hong Kong Island, with multiple retail stores and, most importantly, many prime plots of land on the main island of Hong Kong, such as the Pok Fu Lam farm and many ice factories.

The lands of these factories are either located at the foot of Victoria Peak or in prime areas such as Causeway Bay and Kowloon. If they are developed into real estate, they will surely be a great success.

As a result, Jardine Matheson and Swire Properties set their sights on Dairy Farm, and a battle for equity broke out between the two sides.

In the end, the Hong Kong Land Group won a great victory and acquired the Dairy Farm Company in full.

However, this acquisition was not a cash acquisition, because the Dairy Farm was also a leading listed company at the time and Swire Properties simply did not have the money to buy it.

The method adopted by Swire is share exchange!
Take the shares of Jardine Matheson and exchange them for the shares of Dairy Farm, two shares for one!
At that time, the Hong Kong Land Development was the best listed company, with a market value of 94 yuan per share, while the market value of the Dairy Farm Company's shares was 135 yuan per share.

Once the ratio of two shares for one was announced, which was equivalent to exchanging the 189 yuan shares of the Crown Holdings for the 135 yuan shares, many small shareholders of the Dairy Company immediately switched.

As a result, Swire Properties swallowed up all the shares of the Dairy Farm, completing a huge swallowing operation.

However, this operation also led to a consequence, that is, too many shares of Hutchison Whampoa were distributed, and Jardine Matheson did not have a sufficiently secure controlling stake.

This is not a big deal in itself, because the share price of Hutchison Whampoa is high and the market value is also high. Even if Jardine Matheson does not have a secure controlling stake, there is almost no company that can acquire Hutchison Whampoa.

Therefore, Jardine Matheson has always been able to rest easy, and Hutchison Whampoa actually has the same worried mentality.

"Are you planning to buy back the shares of the Landmark Company from the original shareholders of the Dairy Company?"

"Their combined shares are indeed large, but the problem is that once you acquire the company, with Li Ka Shing's operation in place, these shareholders will just wait and see, waiting for you to fight with Hong Kong Land, and will not sell directly to you."

Bao Yugang said calmly.

Li Changhe nodded: "Yes, so I need your help, Mr. Bao!"

"My help? How?"

Bao Yugang asked in surprise.

"That will have to wait until the battle of Kowloon Warehouse!"

"To put it bluntly, Mr. Bao, Jardine Matheson is currently broke. If it had money, it would not have been unable to resist Li Ka-shing's acquisition of Wharf Holdings."

"The fact that Jardine Matheson finally asked Shen Bi to come forward and stop Li Jiacheng only proves one thing: Jardine Matheson does not have enough money."

"Over the years, all the wealth they gained from Hong Kong Island has been transferred to Southeast Asia and Europe, but it is highly likely that all of this has been lost."

"And if Jardine Matheson refuses to give up Wharf Holdings and a major war breaks out, the only way it can defeat the Pao family is to use the old method of exchanging shares!"

"I guess Hong Kong Land Holdings will definitely take Hong Kong Land's shares and continue to exchange them with shareholders for Wharf Holdings' shares."

There is actually no need to guess what Li Changhe is, because that is what Swire did in history.

When Hutchison Whampoa purchased Wharf Holdings' shares for HK$77, it was actually exchanging Hutchison Whampoa shares worth HK$ for Wharf Holdings shares worth HK$ per share at the time.

Later, Bao Yugang took out cash and bought Hutchison Whampoa's shares at 105 yuan per share.

On one side are shares of Swire Properties, and on the other side are cash. Bao Yugang's cash is worth a higher price. Even a fool would know which one to choose.

As a result, Bao Yu just won the battle of Kowloon Wharf and took control of Kowloon Wharf in one fell swoop.

"I have checked the economic journals these past two days. Currently, Jardine Matheson holds less than 30% of Hutchison Whampoa's shares."

"If he continues to lose shares once the battle for Wharf Holdings begins, Jardine Matheson's control over Hutchison Whampoa will further decline."

“And this is the opportunity I saw!”

Li Changhe spoke seriously to Bao Yugang.

Bao Yugang sat there, thinking seriously. "Are you planning to take advantage of my competition with Jardine Matheson for Wharf Holdings to launch a surprise attack on Jardine Matheson?"

"I just think that if Jardine Matheson and Landsea really use this method to compete for Wharf Holdings, maybe we can use a trick to replace it!"

"You want to take this opportunity to exchange my Wharf shares for Hong Kong Holdings shares?"

At this time, Bao Yugang couldn't help but be stunned by Li Changhe's bold idea.

However, this operation does not sound reliable.

To put it bluntly, the battle for stocks is to see who reaches the 49% shareholding line first.

Because according to Hong Kong law, holding more than 50% of the shares will trigger a general offer clause, and all shares of Hutchison Whampoa must be forcibly acquired.

Neither Jardine Matheson nor Pao Yu-kong has the strength to take over the entire Hutchison Whampoa.

Therefore, 49 percent is their competition line. Whoever reaches this line first will control Hutchison Whampoa.

"I don't need Mr. Bao to exchange Wharf shares for Hong Kong's shares. I just need Mr. Bao to do me two things when the time comes."

"One is to draw on HSBC's funds."

"Looking at the earnings from silver futures, Mr. Bao may invest a lot of money in the stock market, but I hope he can give priority to HSBC's funds as much as possible."

“You want to cut off the possibility of Hong Kong Land borrowing from HSBC.”

Bao Yugang began to speak seriously to Li Changhe at this moment.

Now he has completely entered the business analysis mode.

Although HSBC is the largest bank in Hong Kong Island, there is no doubt that HSBC's internal cash flow is limited.

If Bao Yugang was the first to drain the cash flow held by HSBC, then when Li Changhe launched the offensive, it would be very difficult for Jardine Matheson to get money.

In the whole of Hong Kong Island, except HSBC, other banks find it difficult to come up with enough cash flow to support the shares of Hutchison Whampoa.

After all, the GDP of the entire Hong Kong Island is only around HK$1100 billion.

"What about the second thing?"

Bao Yugang continued to ask.

Li Changhe smiled and said, "If Jardine Matheson surrenders, we will sell our shares in Wharf Holdings to Mr. Bao, and ask Mr. Bao to hold them back."

Historically, after the surrender of Wharf Holdings, although Jardine Matheson lost Wharf Holdings, it also sold its shares in Wharf Holdings to Pao Yu-kong, thereby cashing in more than HK$1 billion.

Jardine Matheson used the money to do two things. The first was to repurchase shares of Hutchison Whampoa.

With this money, Jardine Matheson repurchased its shares in Hutchison Whampoa to about 40%, reaching a fairly safe safety line.

Second, after stabilizing Hutchison Whampoa, use the remaining money to acquire Hong Kong Electric!

That’s right, it was the Hong Kong Electric Company that Li Ka-shing later spent 3 billion to buy. Li Ka-shing bought it from the Hong Kong Land Development.

The Hong Kong Land Development was the company that secretly acquired Hong Kong Electric in 81. Given Jardine Matheson’s poverty, the source of the money for the acquisition is self-evident.

Li Changhe prevented Bao Yugang from taking over Hutchison Whampoa's shares in Wharf Holdings because he wanted to deprive Hutchison Holdings of a chance to recover, thus forcing it into a dead end.

By that time, Jardine Matheson did not have enough controlling rights over Hutchison Whampoa and could not raise enough funds to buy back shares. It had no choice but to wait for death.

This guy's plan is so interconnected, so cruel!
As soon as Bao Yu finished listening to Li Changhe's plan, he couldn't help but sigh in his heart.

Of course, if he were in his place, he could be even more ruthless and wait until he had acquired enough shares of Hutchison Whampoa.

At that time, he would secretly use the shares of Hutchison Whampoa to exchange for the shares of Swire Properties, which would directly derail Hutchison Whampoa and Swire Properties.

Wait, it seems there is indeed room for maneuver.

Bao Yugang thought thoughtfully at this time that he only needed to transfer part of Hutchison Whampoa's shares to another company in advance, and then make a decision based on his acquisition situation at that time.

If the acquisition of shares goes smoothly, then part of the company's shares can be sold to Swire Properties, playing this trick of replacing one thing with another.

Of course, the premise of all this is that Jardine Matheson Holdings really uses the method of share swap to compete with Pao Yu-kong for Wharf Holdings.

Based on Bao Yugang's understanding of Jardine Matheson, this is probably the only path they have to choose in their current situation.

Just as Li Changhe analyzed, Jardine Matheson cannot come up with cash and HSBC doesn't like them now.

"Your plan does sound tempting, but of course, it is also risky. If you really start a dispute with Hong Kong Land, shareholders may not believe you."

After Bao Yugang analyzed the entire plan in his mind, he pointed out a key point.

In this era, people are also selective when selling stocks, depending on their trustworthiness.

Just like the equity battle of the Dairy Company mentioned above, in addition to exchanging shares, Swire Properties also told shareholders a story, saying that after acquiring the Dairy Company, it would develop its land into real estate, and thus the stock value would definitely increase significantly.

Seeing this, the dairy company also announced that it would develop its land and engage in real estate.

The Milk Company brought in a real estate company called Chinachem Real Estate, which was still a small and unknown company at that time.

The Hong Kong property company used Chinachem as an attack point, saying that small companies are completely unreliable.

When the shareholders saw that the partner of the Dairy Company was a small company, they believed what Jardine Matheson said and sold their shares to Jardine Matheson without hesitation, thus allowing Jardine Matheson to swallow up the Dairy Company.

This is exactly what Bao Yugang is worried about at the moment.

Li Changhe's plan is good, but there is one thing: he is not famous. In this era, fame is a very important factor in the stock market.

The effect of Li Changhe's acquisition of Swire Properties and Li Jiacheng's acquisition will definitely be different.

Some shareholders may sell to Li Jiacheng, but probably not to Li Changhe.

"I know, so our plan still requires someone to come forward."

"Who?"

Bao Yugang asked curiously.

Li Changhe smiled and said: "Zhou Xinian"

Zhou Xinian is the boss of the milk company. Of course, he owns more than just the milk company.

But there is no doubt that Jardine Matheson and Land's forcible acquisition of the shares of the Dairy Company was an absolute humiliation for Zhou Xinian.

If Zhou Xinian is willing to step forward and make a call to buy up the shares of Hutchison Whampoa.

Shareholders definitely have a high level of trust in Zhou Xinian. After all, Zhou Xinian's name is there. Even those former shareholders of the Dairy Farm Company who previously sold their shares to Jardine Matheson may give priority to selling to Zhou Xinian.

And there is another benefit of Zhou Xinian stepping forward.

That is to confuse other British capitals. After all, Zhou Xinian has a grudge against Jardine Matheson, so revenge is justified.

Although Li Changhe had never met Zhou Xinian, he felt that if Zhou Xinian was given a chance to take revenge on Jardine Matheson and Hutchison Whampoa, this Chinese tycoon would probably not refuse!

(No more)
(End of this chapter)