Chapter 335 HSBC Goes Crazy
"Aren't you planning to use these shares to exchange for shares in Jardine Matheson?"

Bao Yu just heard what Li Changhe said and asked in surprise.

Li Changhe shook his head.

"Uncle, if you go to 110 directly, I doubt that Yihe will surrender directly."

"They used stocks and bonds to make up the 100 yuan exchange value."

"You can buy it directly for 110 Hong Kong dollars, in cash."

"There is no need to consider how the stockholders choose here."

“Not to mention the difference between cash and bonds, the value alone is one-tenth the difference. Jardine Matheson has no power to fight back.”

"So I guess Jardine Matheson might just choose to surrender."

"It's possible that they will sell the Wharf shares they hold directly to you and make a fortune from it."

"So, I think it would be better for me to give you the shares in advance, so that Bao can collect 49% of the shares of Wharf Holdings in the shortest possible time."

"This way, we can actually drop a bomb on Jardine Matheson."

Li Changhe said thoughtfully.

Bao Yugang nodded thoughtfully: "You mean, we received 49% of the stocks in advance before Jardine Matheson could react."

"So when Jardine Matheson reacts and wants to sell its shares to us, we can also refuse to take over the shares held by Jardine Matheson, so that its shares cannot be sold?"

"Correct!"

Li Changhe nodded. That’s what he thought.

The value of Hutchison Whampoa's shares lies in the fact that in order to compete for control, both parties will definitely compete for the stocks on the market at high prices before reaching the 49% controlling stake line.

However, such high-priced stocks are time-limited, and not all stocks are worth this price.

Once the shareholding of any party reaches 49%, the remaining Wharf shares will immediately become worthless and will fall to their original value.

Because whether the winner or the loser, both will stop the acquisition.

There is no point for the losing party to continue acquiring companies, because even if it acquires more companies, it will not be able to obtain control.

There is no need for the winning party to continue the acquisition, because once the controlling stake exceeds 50%, it will trigger a full takeover invitation under the Hong Kong Companies Act, and the winning party will have to buy all the shares.

But this is obviously impossible.

"What you said does make sense. I originally wanted to slap Yihe to death, but if I do this, it is possible that they will admit defeat directly."

"It doesn't matter if I admit defeat, but it would be a hidden danger if they sell off the stocks to me."

Bao Yugang said with a serious expression at this moment.

Historically, Jardine Matheson sold its shares in Wharf Holdings to Pao Yu-kong and cashed out nearly 1 billion yuan in cash.

With this cash, Jardine Matheson acquired Hong Kong Electric on the stock market. Yes, it was the Hong Kong Electric that Li Ka-shing later acquired!

However, after Jardine Matheson acquired HK Electric, it soon encountered a major real estate crash in Hong Kong Island. Coupled with the end of the Sino-British negotiations, the ownership of Hong Kong Island had a clear answer.

Jardine Matheson Properties suffered a setback, the stock market plummeted, and with Hong Kong Island clearly set to return, it planned to run away again.

So Hong Kong Electric was sold to Li Ka-shing, which became another springboard for the Li family to get involved in the electricity industry.

"Then let's not quote 110 for now, let's quote 105 first. Ah Zheng, you will notify all newspapers in Hong Kong later that starting from Monday, we will buy Wharf shares at a cash price of 105."

"The time is two days, and a total of 2000 million shares will be acquired!"

"2000 million shares?"

Wu Guangzheng was a little surprised. Buying another 2000 million shares, wouldn't that definitely exceed the limit?

"This is sending a false signal to Jardine Matheson. Besides, if we say we will buy 2000 million shares, do we really buy 2000 million shares?"

"We can stop the acquisition when we receive 1500 million shares."

"Or else, we can transfer some of the shares to Ayang's company in advance. Then, our shareholding will exceed 50%, which will make our controlling stake more secure, right?"

Bao Yugang explained to Wu Guangzheng.

All is fair in war. The announcement of acquiring 2000 million shares is also to give Jardine Matheson an illusion, indicating that Pao currently only holds 30% of the shares, giving Jardine Matheson some hope.

"In that case, I'll buy you some time so you can sell your stocks to Jardine Matheson."

"On the one hand, they exchanged their shares in Hong Kong Land, and on the other hand, they increased their shareholdings."

Bao Yugang spoke seriously to Li Changhe at this time.

“Will this bring risks to the acquisition of Wharf Holdings?”

“No, Jardine Matheson’s stake is much smaller than ours actually is.”

"At the beginning, Hong Kong Land held only about 5% of Wharf Holdings. Even if we take into account the Wharf Holdings held by Jardine Matheson and other companies, the total amount was barely 20%."

“This is also the reason why Li Ka-shing targeted Wharf Holdings in the first place. Jardine Matheson’s total shareholding was too weak.”

"Even if they let it acquire shares one day in advance, Jardine Matheson can only acquire 10 million shares at best."

"In fact, with your method, I estimate that Jardine Matheson may not be able to collect 10 million shares, and at most 7 to 8 million shares."

“Its current stake will never reach 30 percent, but we actually have 35 percent.”

"If you include the shares you hold, we are almost at 40 percent. In other words, theoretically, we only need to take 9 percent of the shares to win."

"In this case, appropriately giving Jardine Matheson some slack would cause them to make a wrong judgment."

"In this case, even if Jardine Matheson wanted to surrender, he would have to hesitate for at least half a day or even a day."

"And when he makes up his mind and really surrenders to us, I will then take over one or two million of his shares on the grounds that I have enough controlling stakes."

"You can use the rest as a bargaining chip to negotiate with him to buy the land."

Bao Yugang thought very clearly that as long as he did not take over the shares of Hutchison Whampoa held by Jardine Matheson, these shares would be a burden to Jardine Matheson.

It is completely impossible to expect the market to absorb it.

After the Pao family took control of Wharf Holdings, Wharf Holdings' shares had basically no value except for the market circulation. And if the market circulation value is used, Wharf Holdings' shares are only worth 40 or 50 yuan, which is half of what Jardine Matheson Holdings has.

At this time, when Li Changhe acquired Hutchison Whampoa, he could use these stocks as bargaining chips to give Jardine Matheson some benefits.

After hearing Bao Yugang's analysis, Li Changhe nodded in understanding: "Okay, then let's do as uncle says!"

Early the next morning, the residents of Hong Kong Island woke up and saw the newspapers of that day, all of them were shocked.

"The shipping tycoon made a bold move to buy Wharf shares at HK$105 per share!"

"HKD 20 billion in two days, Pao wants to buy 2000 million Wharf shares in two days!"

"Is it Jardine Matheson's demise or Pao's failure to land? The biggest takeover war in Hong Kong's history has broken out!"

"The decisive battle of Kowloon Warehouse has begun. Who will be the final winner?"

Early in the morning, the newspaper advertisements that Wu Guangzheng had spent a lot of money to buy were once again spread across the entire Hong Kong Island.

This also shows that Jardine Matheson's current cash flow is tight. They don't even have the investment to compete with Pao for front-page newspaper advertising.

Morning, Connaught Building, Jardine’s office.

When Niu Bijian saw the news, he slammed the newspaper on the table.

"Damn, how could he have so much cash?"

"Two billion Hong Kong dollars, how did he come up with that?"

Newby never dreamed that Bao Yugang could come up with 20 billion Hong Kong dollars in cash in one go.

This is almost impossible in Hong Kong Island.

"Big Class"

"Big Class"

At this moment, someone hurried into Newbijian's office.

"Boss, news just came from HSBC that they have approved a credit line of HK$15 billion for Bao Yugang."

HSBC also has Jardine Matheson's spies on its side. After all, Newby-Jardine knows that it is hard to say who HSBC will choose between Pao Yu-kong and Jardine Matheson.

"what?"

"A credit line of 1.5 billion Hong Kong dollars? For Bao Yugang?"

“Is HSBC crazy?”

"Does Shen Bi really dare?"

When Niu Bijian heard the news, he was furious.

He had a hunch that HSBC would stand on Bao Yugang's side.

After all, Newby saw through it when HSBC did not stop Bao Yugang from taking over the shares from Li Jiacheng.

Jardine Matheson may be able to use HSBC to put pressure on Li Ka-shing, but between Jardine Matheson and Pao Yu-kong, HSBC is very likely to side with Pao Yu-kong.

He was mentally prepared for this.

But even Newby never expected that HSBC would support Bao Yugang at such a high cost.

It actually granted Bao Yugang a personal credit of 1.5 billion Hong Kong dollars. What the hell does that mean?
In Hong Kong Island, even if a company has collateral, it may not be able to borrow HK$1.5 billion from a bank.

And now, HSBC actually directly granted a credit of HK$1.5 billion to a single person. Isn't this crazy?
"Big class, what should we do?"

After Niu Bijian's rage, he slowly calmed down.

"How many shares of Wharf Holdings have we received now?"

“Probably less than 28 percent.”

"Twenty-eight percent?"

Newby thought for a moment, then looked at the newspaper again. Bao wanted to acquire 20 million shares, which would mean about 20% of Hutchison Whampoa.

Generally speaking, Bao holds about 49% of the shares. With an additional 50% he can reach the controlling stake of and keep it below %.

After all, the total share capital of the entire Hutchison Whampoa is just over 100 million.

"We are only two percent short of the target now, or at most three percent short of the target. We still have the strength to fight."

Newbijian thought about it and felt that Jardine Matheson still had a chance of winning.

At this moment, another subordinate came to the door of Newbijian's office.

"Boss, the Kowloon Stock Exchange just called and said they have a client who is willing to sell us 300 million shares of Wharf Holdings."

"300 million shares?"

"What are the other party's conditions?"

When Niu Bijian heard his subordinates' words, he was a little surprised at first.

In his opinion, three million shares were enough to make up for the gap between him and Bao Yugang.

"The Kowloon Stock Exchange said that they didn't want Jardine's bonds, they only wanted Hong Kong Holdings' shares."

"If we want, we can exchange it with Hong Kong shares, one Wharf share for nine Hong Kong shares."

"Why didn't he grab it?"

Now one share of Hutchison Whampoa is worth HK$12.2, and 9 shares are worth HK$109.8, which is close to a total value of HK$110.

This is more expensive than Pao's cash acquisition of HK$105 per share. No wonder the other party contacted Jardine Matheson instead of selling to Pao Yu-kong.

"Boss, Bao Yu just held a press conference. Both TVB and ATV are broadcasting it."

Just at this moment, another secretary came to the office and reminded Newbyjian.

Upon hearing this, Niu Bijian immediately turned on the TV in the office. Sure enough, TVB Jade Channel was broadcasting the press conference held by Bao Yugang.

(End of this chapter)