Chapter 476: Chapter 476: Luxury Brand Layout
After spending a week combined in New York and Austin, Charles Capet flew to Europe.
First, Charles signed an agreement in London to acquire the Canary Wharf HSBC Building together with the Korean Pension Fund and HSBC Holdings Group. Additionally, they signed a leaseback agreement with HSBC Bank, which would lease the building for 45 million pounds a year.
Dawn Investments contributed 500 million pounds, while the Korean Pension Fund contributed 300 million pounds to acquire a 999-year lease on the Canary Wharf HSBC Building. Capet Pictures held a 70% stake, and the Korean Pension Fund held 30%.
Initially, Charles planned to mortgage part of the funds, but after realizing the high interest rates, he decided to pay the 500 million pounds in cash directly. There was no other way, as Charles had quite a bit of cash on hand.
Quickly, Capet Capital's headquarters in London moved to the HSBC Building.
"This view is pretty nice; you can see the Thames and overlook London," Charles commented to Lily Ying in the high-level office of the HSBC Building.
"Charles, you're about to become a major shareholder in Tencent. Aren't you going to check it out?" Dawn Fund owned 22% of Tencent's shares, spending 2.2 billion dollars in cash.
"Probably. You just returned from Milan, what's the situation?" Charles asked, having 1.5 billion euros invested in luxury brands.
Lily handed Charles a file regarding the equity agreements:
"LVMH Group spent 600 million euros to acquire 10% of their shares;
Hermes Group spent 400 million euros to acquire 8% of their shares;
Italian jewelry brand Bvlgari spent 500 million euros to acquire 15% of their shares.
Capet is now Bvlgari's second-largest shareholder, right after the Bvlgari family fund with 30%!"
Charles nodded. Due to the financial crisis, the stock prices of European luxury brands dropped, with LVMH Group's current market value at around 42 billion euros.
Bvlgari's market value was around 4.2 billion euros, so there was no problem with a premium acquisition, and Hermes had a market value of about 7 billion euros!
Hermes, Bvlgari, Prada, and Versace were all Italian luxury fashion brands, still controlled by their founding families.
Among the three major European luxury groups, LVMH Group owned Givenchy, Dior, Louis Vuitton, Hennessy, Moet, Fendi, Guerlain, and Kenzo, making it the absolute leader.
The Swiss Richemont Group owned Cartier, Vacheron Constantin, Jaeger-LeCoultre, IWC, Lange, Van Cleef & Arpels, and Piaget, ranking second in top watches and jewelry brands.
The PPR Group (still known as the Kering Group) owned Gucci, Saint Laurent, Boucheron, Balenciaga, and Girard-Perregaux.
Charles especially wanted Hermes because it was the absolute aristocrat of luxury brands, but he knew that LVMH Group had been secretly acquiring Hermes shares, preparing for a hostile takeover.
Just like Bernard Arnault's hostile takeover of Gucci years ago, where he secretly bought shares to catch everyone off guard. If not for the intervention of the French PPR Group, Gucci would already be a brand under LVMH.
Now, Bernard Arnault was doing the same with Hermes. However, more than 70% of Hermes shares were in the hands of the Hermes family descendants, although no single individual held more than 5%.
LVMH Group's takeover attempt of Hermes would fail once more. As long as the Hermes family united to place over 50% of their shares into a family fund, they wouldn't lose control.
The Hermes family-held shares were not comparable to the Gucci family back then. As long as they united internally, outsiders had no chance.
If one holds more than 5% of the shares, it needs to be reported. This is why Lily stopped the acquisition at 4.9%.
"Bernard Arnault likely holds his own 5% shares along with other institutions helping him buy out to proceed with a full takeover of Hermes," Charles recognized the cunning old man, wondering what methods he used to avoid scrutiny.
Back when he tried to take over Gucci, he got sued by Gucci and lost the lawsuit.
Prada and Versace weren't targeted because these brands didn't perform well in recent years, making their investments risky.
"By the way, what about the Alibaba shares from Yahoo?" Charles asked.
There was still 2.1 billion dollars of cash left unspent, 1.5 billion pounds were gone, and 1.5 billion euros still had 40 million left over!
Lily looked at Charles, her mouth twitching at the way he casually threw money around. "Yahoo's asking price won't be low; Alibaba's market value on the Hong Kong stock exchange is around 80 billion Hong Kong dollars now!"
"Don't worry, Yahoo needs cash now, and Alibaba's stock price is dropping, right?" Charles was well aware of Yahoo's troublesome situation, and he knew that if the price was right, Yahoo would be willing to sell.
"Let's go to Hong Kong together and settle the Alibaba deal," Charles remarked, planning to meet with Tencent's management and finalize Alibaba's shares.
Lily nodded. Recently, her fund also acquired around 4.9% of Tencent's shares, hoping Charles's keen eye wouldn't be wrong.
Mid-March, Charles and Lily flew to Hong Kong together.
...
In Japan, Tokyo, at Sony headquarters, Sony Music Entertainment Chairman Rolf Elgeti looked troubled in Howard Stringer's office.
"Michael Jackson mortgaged his 50% stake in Sony/ATV Music Publishing to Charles Capet?" Howard Stringer confirmed.
Rolf Elgeti nodded, "Capet Records backed Michael Jackson's debt through West Pacific Union Bank, which was recently acquired by Charles Capet."
Rolf Elgeti had originally been the chairman of BMG (Bertelsmann Music Group), part of Bertelsmann Entertainment Group in Germany.
At the end of 2004, Sony Music and BMG merged to form Sony BMG, with each holding 50% shares. Afterward, Rolf Elgeti became the chairman of Sony BMG.
Last year, Sony bought the remaining 50% of Sony BMG from Bertelsmann, making Sony BMG a wholly-owned subsidiary of Sony, reverting to Sony Music Entertainment.
"Charles Capet, huh," Howard Stringer sighed, knowing Capet was no small fry.
Just a few days ago, Forbes magazine released its 2009 Rich List, placing Charles Capet 18th with a net worth of $15 billion!
"He's definitely eyeing that 50% stake of Sony/ATV Music Publishing. Snatching it from Capet won't be easy," Howard Stringer rubbed his bald head, clearly distressed.
"Not only that, Michael Jackson also signed a new record deal with Capet Records and plans to release a new album next year," Rolf Elgeti continued.
"Michael Jackson is releasing a new album?" Howard Stringer, who had managed Sony Records in the past, understood Michael Jackson's draw.
Considering Michael Jackson's record label partner for years had been Sony Records.
"Starting in July, Michael Jackson will host 20 concerts at the Millennium Dome in London. The concert organizer AEG Entertainment was originally persuading Michael to do 50 shows, but after discussing with Capet Records, they agreed on 20 shows," Elgeti explained.
"It seems Charles's initial thought was Michael should consider his health first, so 10 shows should be enough," Elgeti implied that Capet highly valued Michael Jackson.
Sniping at Michael Jackson now meant competing with Capet.
"Darn it!" Howard Stringer was already in a tough spot, as the anticipated Blu-ray DVDs were underwhelming due to the rise of streaming media.
The economic crisis had also worsened the situation for Sony Electronics.
Now hearing that Michael Jackson had aligned with Charles Capet made things even worse!
*****
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