章節 1047: Chapter 1047: The King of Hong Kong Energy
Li Zhaoji's pupils contracted, and he remained silent as the situation regarding the China Gas Company quickly flashed through his mind.
He did own shares in the China Gas Company, but they were not in Henderson Land Development Company, but in Wing Tai Properties Limited.
Henderson Land Development Company, which went public in June this year, was founded by him alone, but Wing Tai Properties Limited was founded by him in partnership with Wu Baoxing after he left Sun Hung Kai Enterprises at the end of 1972.
Although he has undergone several share expansions and is now the largest shareholder and chairman of Wing Tai Properties, he has not yet completely acquired Wing Tai Properties.
It is not that he does not want to completely acquire Wing Tai Properties, but he does not have enough funds for the time being, and his partner Wu Baoxing is still resistant.
But now there seems to be a good opportunity...
Although he also has ideas about the China Gas Company, Xia Yu has now come knocking. Xia Yu's style of doing things means that the preliminary preparations will definitely not be poor, and Wing Tai Construction's shareholding ratio may not necessarily give it an advantage. And his capital is even less than Xia Yu's, and a head-on collision will definitely result in a complete loss, and it will also delay his bottom fishing and growth during this rare opportunity.
It would be better to stop in time and cut off his attachment to China Gas.
Moreover, if he divested his stake in China Gas and sold it, according to his shareholding ratio, he could get a large share of the proceeds, and then he could go ahead and acquire Wing Tai Properties.
After all, he was already preparing to buy up land and properties, and the assets of others were definitely not as important as the company he had built with his own hands.
And there is indeed a gap in his funds.
Xia Yu, who is rich and arrogant, has set his sights on China Gas. He knows he can't win the fight, so he has given up hope and is focusing his main energy on real estate and property...
Xia Yu sipped his tea intently, waiting patiently. He had already analysed the situation before coming here. Given Li Zhaoji's current situation and his style of getting along with people, he would not hold on to the China Gas stake. The key point is that the money has to be in place.
Sure enough.
After thinking it over, Lee Chaoji took a sip of tea, smiled and said, 'Mr Xia, Wing Tai Properties owns 26.4% of the shares in Towngas China. We've been friends for a long time, and since you need it, I'm happy to help you.'
'But as you know, Wing Tai Properties is not owned by me alone, it was founded by me and Wu Baoxing. I can persuade him to sell his shares, but I need to be able to say yes to the price.'
Xia Yu nodded and said, 'That's only right. In business, there must be a reasonable price that is acceptable to both sides.'
'In that case, you might as well listen to my opinion and price first.'
Li Zhaoji smiled, nodded, made a gesture of invitation, and looked at Xia Yu quietly.
Xia Yu took a sip of tea to clear his throat and said slowly, 'During the morning break today, the total market value of the China Gas Company was more than 1.369 billion Hong Kong dollars. After the afternoon session began, it continued to fall, so let's use 1.37 billion Hong Kong dollars as the base.'
'On this basis, I will pay a 30% premium for the shares held by your company.'
'What do you think, Mr Lee?'
With HK$13.7 billion as the base, 26.4% of the equity is worth HK$361.68 million.
A further 30% premium would be just over HK$470 million!
Li Zhaoji quickly calculated a figure in his mind.
This figure was undoubtedly much lower than before the stock market crash.
He remembered clearly that before the battle between the Jiuding consortium and the Swire consortium, the market value of the China Gas Company had peaked at HK$3.2 billion, and the paper value of his stake was just over HK$840 million.
Now it had shrunk considerably!
Li Zhaoji smacked his lips, pondered for a moment, and said with a look of difficulty, 'Mr Xia, is this price too low? Not to mention the market value after the Hang Seng Index reached 1,800 points, before that, if someone wants to buy my stake, it's not negotiable without 1.2 billion Hong Kong dollars.'
Xia Yu knew that Li Zhaoji would not be unaware of the situation and that he was just trying to raise the price.
However, Xia Yu could not agree with him. The difference in the amount was huge. He was here to buy low, not to be a fool.
Therefore, Xia Yu bluntly retorted, 'Mr Li, you can't put it that way. The past is the past. We have to speak based on facts. No matter how high the market value of China Gas was before, the situation is different now.'
'Since the stock market crash, no one knows what the future will bring. The stock market crash in 1973 took six to seven years to recover, and even if this one is less severe, it will still take five years.'
'If I buy the shares at the previous high price, it will be five years before the share price rises back to the previous level, and the value of the shares will be the same as the capital I invested.'
'But at the current bank lending rate, which is a median 16%, the interest on HK$1.2 billion for five years would be HK$960 million. I might not get my money back for ten years.'
'And five years from now, money is not the same as it is today.'
'If you were to buy the shares and assets of others now, would you do it at the current price or the previous price?'
Li Zhaoji laughed, not feeling embarrassed at all, and said in self-defence with a smile, 'Mr Xia, I'm not saying I want to follow the previous high price, I'm just doing a price comparison.'
'After you've said so much, I also have an opinion. After all, Towngas is not like other companies. It is the only gas production, transmission and supplier in Hong Kong, and it is also the only supplier of central piped gas in Hong Kong. It has an irreplaceable monopoly.'
'Although the stock market crash has caused the value of many assets to depreciate, the price of gas used by residents will not change, so the profits of the China Gas Company will not decrease significantly.'
'A 30% premium is indeed a bit low. I think 80% is more appropriate, and Hu Baoxing will have no problem with the price.'
Xia Yu immediately retorted, 'Mr Li, you mentioned the monopolistic nature of the China Gas Company, which is true, but precisely because of its monopolistic nature, as a public utility company, it also has the highest price-to-earnings ratio in that sector. It is much higher than the price-to-earnings ratios of public utility companies that I have previously acquired, such as China Power Company and Kowloon Motor Bus Company, and I am well aware of this.'
'Even now that the stock price has fallen, the price-earnings ratio of China Gas is still at a relatively high level.'
'As for the profits you mentioned, they will definitely decrease significantly. There have been many companies that have gone bankrupt due to the stock market crash, and the consumption of gas by companies will decrease significantly. Individuals will subconsciously save on gas consumption due to their empty wallets...'
'Eighty percent premium is too much, but since you asked, I won't give you face by not accepting it. How about this, add five more points to the premium.'
...
Although Xia Yu and Li Zhaoji were negotiating, they were both very restrained and mindful of the atmosphere, avoiding any discord. The tone of the negotiation was completely reasonable.
If they felt that the other party had a point, they would consciously take a step back.
In the end, Xia Yu was slightly better, and when he set the price at 50% premium, Li Zhaoji didn't know what to say.
'Mr Xia, I have truly appreciated your eloquence today, I must say I am impressed,'
said Li Zhaoji with a wry smile, and offered Xia Yu a refill of tea.
Xia Yu smiled modestly and said, 'You are too kind, you just don't want to argue with me too much.'
Li Zhaoji shook his head and said with a smile, 'You are too modest, Mr Xia.'
After laughing, Li Zhaoji put a stop to the laughter and said to Xia Yu, 'Mr Xia, I personally have no problem with a 50% premium, but I need to go and ask Hu Baoxing tonight to see what his attitude is. How about I give you an answer in the morning?'
Xia Yu nodded with a smile, "No problem, I'll be waiting for your good news.'
Li Zhaoji joked, "I can't say for sure if it's good news or not.'
'Haha...'
...
After sitting for a while longer, Xia Yu proposed to take his leave and left at ease.
He wasn't worried at all that Hu Baoxing would disagree. Given Li Zhaoji's shareholding ratio and position in Yongtai Jianye, his earlier remark that he would need to consult Hu Baoxing was just an excuse to give himself room for negotiation.
If Li Zhaoji really had no decision-making power, he wouldn't have gone so far as to negotiate a 50% premium with Xia Yu alone.
He only needs to prepare the funds and lawyer to prepare for signing the contract tomorrow.
As expected, Xia Yu received a call from Li Zhaoji the next day after work, describing the process of 'convincing Hu Baoxing' and asking when he could come over to sign the contract.
Since the shares were safely in his pocket, Xia Yu immediately told him that he would come over right away.
After hanging up the phone, he took the people to Henderson Land Development Company to sign the acquisition contract with Li Zhaoji.
By 9:32 a.m., the contract had been signed. The purchase price was 542.52 million Hong Kong dollars, and the funds needed to be transferred to Yongtai Jianye's account at Jiuding Bank within three days for the contract to officially take effect.
Xia Yu did not let Li Zhaoji wait either. After leaving, he asked Liu Tianci to transfer the funds, which were transferred to Yongtai Jianye's account before 10:00 a.m., and Li Zhaoji was notified.
Over the next two days, Xia Yu successively visited Li Mingze of the Li family and Li Fushu, chairman of the board of directors of the Bank of East Asia, and acquired 16.5% and 5.1% of the equity respectively at a premium of 35% and 25%, spending a total of over 386 million Hong Kong dollars.
This, together with the 12.8% stake originally bought by Jiuding Securities during the past two years, the 11.2% stake originally held by Hang Lung Bank, which was acquired by Jiuding Bank, and the 6.4% stake held by Standard Chartered Bank,
Xia Yu now held a total of 78.4% of the shares in the Hong Kong and China Gas Company.
Xia Yu then gathered all these shares together and put them under the Jiuding Energy Group.
Amidst the buzz, the first thing Jiuding Energy Group did after taking over China Gas was to apply to the stock exchange for delisting and privatisation.
Following the electricity sector, the gas market was also monopolised by the Jiuding consortium. Some well-wishers secretly gave Xia Yu another domineering title – the king of energy in Xiangjiang.
Towngas became the first company to voluntarily apply for privatisation before the stock market crash was over. Many tycoons with funds in their hands seemed to have heard the charge of the trumpets and took action.
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