Capítulo 593: Chapter 594: Come Here
[Chapter 594: Come Here]
Watching the three old men across the table furrow their brows at the data in the notepad, Eric calmly explained, "Firefly insists it can only sell a maximum of 25% of its shares. However, since both ABC and Firefly are registered in Delaware, according to Delaware's General Corporation Law, if the parent company acquires 90% of the subsidiary, the parent company's board can unilaterally propose to privatize the remaining circulating shares. The method of privatization is determined by the parent company, and there is no need to consult the subsidiary's board or investors. So if ABC can cooperate with Firefly to acquire 90% of the shares beforehand, we can buy out the remaining 10% in cash, and the other shareholders won't have to participate in the 25% equity swap. Therefore, the equity obtained by Berkshire Hathaway and Mr. Murphy's company would not be less than what Mr. Buffett proposed."
Taxes are divided into federal and state taxes. However, there is a significant difference in state tax percentages, and due to Delaware's unique tax exemption policy, many companies choose to register there.
As a well-known lawyer, Charlie Munger quickly identified some issues, saying, "But, Eric, have you not considered that this plan could still likely provoke an SEC investigation?"
Although Eric's proposal was not illegal, it teetered on the edge. As the most mature bond market in the world, the U.S. prioritized the protection of small shareholders' interests far more than those of major shareholders. Eric's proposal raised suspicions that ordinary shareholders could lose their autonomy. If this proposal incited discontent among minority shareholders leading to a lawsuit, Firefly would still find itself in hot water.
Eric did not shy away from Charlie Munger's gaze. "I consulted the company's lawyers, and this is not illegal. Similarly, ordinary shareholders' interests won't be harmed. Firefly will still offer to buy their shares at a price 50% higher than the stock price."
While the two men engaged in dialogue, Buffett imagined the downfall of Solomon Brothers four years ago. Whenever he thought of it, a chill ran through him. The downfall was not merely because of the false bidding scandal, but due to the lengthy lawsuits and credit crisis that followed. Before the Solomon Brothers incident, Buffett had scarcely appeared in court in almost sixty years, and he had never been a defendant. Compared to other investors who were often embroiled in disputes, this was an impressive record.
Now, even though Buffett knew that accepting Eric's proposal would maximize Berkshire Hathaway's interests, it would also bring unnecessary legal risks to both parties involved. This risk had crossed a line that Buffett could not tolerate. "Eric, I do not agree with your plan."
Eric was somewhat surprised, but Charlie Munger and Tom Murphy, who were very familiar with Buffett, showed no odd expressions. They both knew Buffett was inherently overly cautious.
Once Buffett's words were spoken, the conference room fell silent.
However, everyone realized the underlying implication of Buffett's last statement: he did not reject the deal itself, merely Eric's plan. Therefore, all waited for him to continue.
Although Buffett maintained a calm exterior, he felt an internal conflict, unlike the struggles he faced during the Solomon Brothers' crisis a few years prior.
If he gained absolute control of ABC, he might have been tempted to reject the deal out of pure instinct. Buffett was not one to bargain well; when he sensed that something had slipped out of his control, he typically ended it decisively to avoid wasting energy. He applied the same logic when investing in companies -- he generally did not linger in situations he could not control but chose to sell off his shares instead.
Currently, the situation with ABC had slipped from his grasp, even his influence accumulated over decades in the investment world seemed ineffective. Firefly's rise was more legendary than his own success story. Aside from him and a few old friends, many major shareholders of ABC had already shifted to Firefly's side.
Buffett knew that if he did not strike a deal this evening, under Firefly's covert support, a group of ABC shareholders might convene a special shareholders' meeting to push the transaction through.
If the deal went through without his approval, it could lead to scenarios similar to Eric's proposal of excluding 10% of minority shareholders. They could also draft other plans that would encroach on the interests of Berkshire Hathaway and Tom Murphy, which could ultimately cost them their influence over ABC and the future merged company, irrespective of whether their economic interests remained intact.
Furthermore, if the deal collapsed, the consequences would be even more unpredictable. The U.S. viewing audience size is fixed. ABC had secured its leading TV market share in North America not only due to its stable operations but also because its competitors NBC and CBS were both in a slump. Whether Firefly took over NBC or CBS, its strong content production capabilities would pose a significant threat to ABC's status. General Electric held absolute control over NBC, but management, with support from other shareholders, had created considerable instability. If ABC's performance began to decline, the disgruntled shareholders would likely escalate matters, creating a vicious cycle that would jeopardize the network's operations.
The room remained silent for a full five minutes as everyone patiently awaited Buffett's final decision.
Finally, after a deep sigh, Buffett softly remarked, "I might regret this decision in the future."
As the words echoed in the room, everyone sensed that Buffett had made his decision.
Eric smiled confidently and said, "Warren, I assure you, you will not regret today's decision."
Buffett did not react much to Eric's remarks, but since he had made up his mind, he no longer lingered on the details. He simply agreed to Firefly's offer of 25% equity and $10 billion in cash.
After a brief toast with champagne to celebrate, Buffett and his two companions declined Eric's invitation and left the Sunset Tower Hotel.
...
In the underground parking lot, as they watched Buffett's car drive away, Eric turned to Katzenberg and smiled, "Jeffrey, you will host the next press conference."
Katzenberg understood that completing the acquisition of ABC would significantly boost his career, so he excitedly responded, "Eric, should we hold a senior meeting now to prepare?"
Eric tapped his watch. "You have to think about others' feelings. It's the weekend, and it's already 8:30 PM."
"Fine, let's do it tomorrow," Katzenberg seemed entirely unaware that tomorrow was Sunday, but Eric chose not to stop him, knowing the executives wouldn't blame him.
Katzenberg hurried off to deal with the reporters who had been waiting, while Eric and Jeffrey returned to the party, joking and chatting.
News that Eric had arranged for champagne to be sent to the conference room had spread throughout the party, and guests began to gather around him to offer congratulations.
Although the negotiation hadn't taken long, Eric felt tense throughout the entire process. Buffett did not want the transaction to fail, and neither did Eric. If it did, all the preliminary work Firefly had done would go to waste, and everything would have to start over.
Now, feeling a sense of relief, fatigue began to set in. After exchanging pleasantries with everyone, Eric sank into a sofa in the corner of the hall.
...
Watching Penelope deliberately walk by with Kate Beckinsale and Charlize Theron, Eric smiled and patted the sofa beside him. Without hesitation, Penelope walked over, grinning as she sat next to him. Sensing that Eric in the middle of the sofa didn't intend to move, the other two women exchanged glances, and finally, Charlize took the initiative to sit down on Eric's left, with Kate following suit beside her.
Penelope, oblivious to the little details, leaned slightly against Eric and excitedly said, "Eric, today Kate and I tried on dresses together. They're beautiful! Do you want to take a sneak peek?"
Eric was a bit puzzled and asked, "Oscar dresses?"
Penelope nodded, "I shot a movie called Belle Époque before coming to the U.S. which got nominated for Best Foreign Language Film, and I received an Oscar invitation."
Now Eric understood, the promotions for Charlie's Angels had already begun. Since Penelope was attending the Oscars for Belle Époque, it must mean Kate was there for the Shakespearean comedy Much Ado About Nothing. Eric remembered that this film had won no awards at the Oscars in the original timeline, and it seemed MGM had put in considerable work to promote Charlie's Angels. Moreover, the two people at the helm of MGM, one had been a Paramount executive and the other had been a producer at Warner Bros. With their years of accumulated connections, it wouldn't be difficult to orchestrate an inconsequential nomination for Much Ado About Nothing, allowing Kate to seamlessly appear at the Oscar ceremony.
Curious about this, Eric turned to Kate and asked, "What nominations did Much Ado About Nothing receive?"
"Best Costume and Best Score," Kate replied, somewhat bashfully. Although she hadn't been in Hollywood long, she knew this Oscar attendance was purely due to luck.
Eric recalled his experience at the Golden Globes in January and laughed, "Those are rather fitting nominations. It would have been completely absurd if you'd only received a Best Picture nomination without any heavyweight awards, like at the Golden Globes."
Hearing the three discuss the Oscars, a flash of disappointment crossed Charlize's eyes.
Although she had moved out of the three-way apartment, Penelope maintained an excellent relationship with the two women as Eric had requested. Even though Charlize quickly raised a glass of red wine to mask her expression, Penelope noticed Charlize's change in demeanor and thus said to Eric, "Eric, why don't you help Charlize get an Oscar invitation too? That should be an easy task for you."
Eric glanced at Charlize, whose expression clearly showed expectations yet retained an air of restraint, and replied, "It's unnecessary; next year you three can attend the ceremony together. Perhaps you'll even take turns being award presenters."
Upon hearing Eric's refusal, Penelope said nothing more, but Charlize noticeably drooped her head in disappointment.
Kate's sparkling eyes glanced back and forth between Eric and Charlize, raising her eyebrows slightly. She felt Eric was definitely being deliberately coy.
Eric noticed the subtle shift in Kate's expression but didn't mind if she caught on, maintaining his smile and suddenly asking Kate, "Do you still smoke?"
Kate froze for a moment, quickly shaking her head, "No, no."
"Hmm..." Eric dragged out the response, "Looks like you do."
Realizing her guilty conscience was blatantly obvious, Kate quickly said, "You can deduct from my pay if you want."
Eric smiled and said, "Actually, you could just privately subsidize the two of them."
Staring at Eric's relaxed smile, Kate realized he wasn't being serious, so she followed suit with a lighthearted tone, "Okay, you can penalize me; I'll make it up to them privately."
Eric shrugged, leaning back against the sofa, took a small sip of his wine, and waved, saying, "You guys go have fun. I'll rest for a bit."
Maybe feeling relaxed now, Kate responded, "You really sound like an old man."
"Oh," Eric nodded, replying, "Penelope and Charlize, you two go have fun. Kate, just stay here with this old man for a while."
"Charlize, let's go dance," Penelope got up, wrapping her arm around Charlize, smiling as they walked toward the dance floor.
Eric looked at Kate, who remained seated, and patted the spot that Charlize had just vacated. "Come here."
Kate shifted away, saying, "I was just joking, you know. This is a public place; you can't just act out like that."
"In that case, what are you afraid of? Come here!"
Kate stood firm, "I'm not coming over!"
*****
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