Chapter 763: Phoenix Merrill Lynch

……

Facing everyone's eyes, Guo Shouyun strode to the main seat in the middle of the desk in the conference room and sat down. Wang Jue and Wu Xiaojing sat behind him on the left and on the right. Stephen Bryan with representatives from Phoenix Bank, Michael Moretz with representatives from Merrill Lynch, and Liu Zhixing with representatives from the Bruce Foundation also sat in their seats one by one.

You're all set!

After his eyes quickly swept over everyone's faces, Guo Shouyun said in a deep voice: "Welcome to Phoenix Merrill Lynch's financing meeting. I have known you for many years, and time is precious, so I will not be able to avoid tasteless politeness here. When it's over, we'll have plenty of time to communicate with each other. … Next, let's get down to business. ”

Without waiting for Guo Shouyun's instructions, Wang Jue and Wu Xiaojing had already distributed the detailed operating information of Phoenix Bank and Merrill Lynch, especially the copies of the financial information, to every representative of the consortium present.

Today, we will briefly introduce the general operations and financial statements of the two companies, so as to set a tone for the subsequent negotiations. ”

Seeing his gaze, Stephen Bryan nodded and took out the materials that had been prepared a long time ago.

As of the first quarter of 2005, Phoenix Bank achieved operating income of 12.249 billion US dollars, a year-on-year increase of 13.5%, net profit of 3.671 billion US dollars, a year-on-year increase of 11.3%, return on net assets of 21.57%, return on total assets of 9.73%, capital adequacy ratio of 12.07%, of which tier 1 capital adequacy ratio of 12.41%. The non-performing loan ratio was 0.65%. The total assets of the bank are 698.37 billion US dollars. ”

“… At present, Phoenix Bank has 4,277 branches throughout North America, covering almost all financial segments, including commercial banking, investment banking, financial credit, wealth management and insurance. Our private equity business has grown 12.8 times in three years, outpacing all our global peers. Our wealth management and asset management business has repeatedly made the front page of business media such as Business Week and Fortune Magazine. Our venture capital business, particularly in the high-tech sector, has been emulated by Wall Street and Silicon Valley. ”

“… In addition, the greatest wealth of our Phoenix Bank is our chairman, whose financial talent has been vividly reflected in many events in the past five years! Therefore, I believe that the future of Phoenix, or Phoenix Merrill Lynch, must be limitless!"

Guo Shouyun, who was unexpectedly slapped on the back, smiled and motioned for Michael Moretz to pick it up.

As of the first quarter of 2005, Merrill Lynch had total assets of $179 million, of which $132 million were managed in the private client business, and the global asset management business held a total of $557 billion, shareholders' equity of $22.78 billion, net income of $9.5 billion and net profit of $1.73 billion. ”

Currently, Merrill Lynch has 975 offices in 44 countries and 48,000 employees. In total, the company has 49 business units. We are currently the world's largest economic company, the world's second-largest mutual fund firm, No. 1 in U.S. mergers and acquisitions, No. 1 in U.S. research teams and No. 1 in municipal dealers by Institutional Investor magazine. Euromoney International Equity Research Firm of the Year, Most Innovative Derivatives Trading, Best Brokers, Best European and Global Bond Lead Underwriter. Japan's leading foreign securities firms selected by Nikkei Survey, etc. With a history of nearly 100 years, Merrill Lynch is not only rich in heritage, but also the world's top comprehensive investment bank!"

After he finished his introduction, Guo Shouyun's gaze quickly swept over everyone, "Everyone, I believe you have heard it too." If Phoenix and Merrill Lynch merge, it will create a super financial giant with total assets of more than $2.5 trillion, annual main business income of more than $75 billion, annual net profit of more than $16.8 billion, and self-owned assets of more than $90 billion, and a dominant position in many subdivisions such as private equity financing, wealth management, asset management, financial product research, and municipal bonds!

“… I am confident that when that moment comes, everyone here will be richly rewarded!"

"Bang Bang...!"

After a period of applause that was not too warm, Guo Shouyun continued: "Regarding the merger plan of the two companies! The detailed plan is already in the document for you, you can go back and read it again. Here is simply a summary of the strong alliance, give full play to their respective advantages, and make the future of Phoenix Merrill Lynch more brilliant. Regarding the company's leadership, I serve as Chairman of the Board, Stephen Bryan as CEO, Michael Moretz as Co-CEO, Ruben d'Estaing as President and COO, and Patti Sellers as CFO...!"

More than half of the top management of the new company were Phoenix people, and Merrill Lynch's top management was fired by a contract except for a few cronies such as Gregory Fleming, Peter Krauss, and Thomas Montag, who were able to stay in office and were not Stan O'Neill.

“… In addition, I have always thought that Merrill Lynch's 'management committee' system is very good, so I am prepared to keep it. As for the specific personnel, it will be decided after a meeting and discussion after the merger of the two companies. ”

Merrill Lynch's management committee system is the company's decision-making body, and the members are all senior executives of the company, with 23 people! Of course, there is no truly perfect system in the world, otherwise Merrill Lynch would not have lost a lot in the subprime mortgage crisis and was bought by Bank of America.

But compared with the management system of those CEOs who make a decision, Merrill Lynch's 'management committee' collective management system is more recognized by Guo Shouyun.

“… As for the company's board of directors, all the institutions present today that own 1% of Phoenix Merrill Lynch have the right to be represented on the board. The number of directors on the board of directors will be limited to 25~30!"

“… Specific financing criteria. Now the largest financial institution in the United States is Citigroup, its revenue in the first quarter of this year was 22 billion US dollars, net profit was 7.46 billion US dollars, Tier 1 capital of 79.4 billion US dollars, 2.1 trillion total assets, 21.7% net profit growth, 37.2% return on investment. The price-to-earnings ratio is 22 times, and the market capitalization is $253.7 billion. ”

"The second largest financial institution is Bank of America, with revenue of $15.2 billion, net profit of $4.96 billion, tier 1 capital of $61.4 billion, total assets of 1.6 trillion yuan, net profit growth of 18.7%, and return on investment of 31.2%. The price-to-earnings ratio is 19 times, and the market capitalization is $191.7 billion. ”

"The third largest financial institution is MG Chase, with revenue of $12.7 billion, net profit of $3.96 billion, tier 1 capital of $54.4 billion, total assets of 1.4 trillion yuan, net profit growth of 19.3%, and return on investment of 29.2%. The price-to-earnings ratio is 18 times, and the market capitalization is $152.3 billion. ”

In comparison, Phoenix Merrill Lynch's revenue in the first quarter of this year was US$19.749 billion, net profit was US$5.4 billion, tier 1 capital was US$90.7 billion, total assets were US$2.57 trillion, and the comprehensive net profit growth rate was 20.97%. With the exception of Citi, our key figures are no worse than any other bank, and we even far outperform Citi in terms of Tier 1 capital adequacy ratio and total assets. ”

"Based on Phoenix Merrill Lynch's comprehensive operations and various financial data, we believe that Phoenix Merrill Lynch's market capitalization should be around $220 billion. In view of the special circumstances of this financing, I would like to talk to you on the basis of a discount of 90%. ”

The estimated market value is 220 billion US dollars, and 198 billion US dollars is 198 billion US dollars!

After everyone present exchanged glances with each other, Goldman Sachs CEO Blank Fein was the first to speak.

"Bruce, I think Phoenix Merrill Lynch's estimated market capitalization is a bit too high. First of all, compared with Bank of America's net profit of $4.96 billion, Phoenix Merrill Lynch's $5.4 billion does not reflect enough advantages. Second, Citibank's equity multiplier is eleven, Bank of America's is ten, and Phoenix Merrill Lynch's combined equity multiplier is fourteen, which undoubtedly means that Phoenix Merrill Lynch's total assets of $2.5 trillion contain higher risk than Citigroup. ”

The inverse of the shareholder's equity ratio is called the equity multiplier, which is how many times the total assets are to the total shareholders' equity. The equity multiplier reflects the size of the company's financial leverage, and the larger the equity multiplier, the smaller the proportion of capital invested by shareholders in assets, and the greater the financial leverage.

“… Therefore, I think the estimated market value of Phoenix Merrill Lynch is between 1800~200 billion US dollars, which is more reasonable!"

"I agree with Mr. Finn. In addition, today's financing is not just pure financing, but also contains certain off-market factors. All in all, Phoenix Merrill Lynch's valuation, as well as the price discount, should be more favorable. Bear Stearns representative Charles Prince.

He was also in the Schiff and Citi camps at the beginning, but in the end, he still couldn't resist the temptation of financing after the merger of Phoenix Merrill Lynch, so he was pulled over by Blank Finn. Now, the two sides clearly have the appearance of a united front.

As for the off-market factors he said, it is nothing more than that to become a shareholder of Phoenix Merrill Lynch, it is necessary to mobilize its own forces to promote the merger of the two companies, and this will undoubtedly compete with Schiff, Citigroup, ING Group and other large institutions that oppose the merger of Phoenix and Merrill Lynch, and it will take a lot of energy and even financial resources in the middle!

"Ladies and gentlemen, my conflict with Citigroup, Schiff, ING Group and other institutions is not a secret, and I believe you are all aware of it. It was precisely because of their opposition that I took a lower discount on Phoenix Merrill Lynch's financing. Otherwise, wouldn't it be good for me to keep tens of billions of dollars of wealth in my own hands?... I hope you understand that there is a price to make money! As for the difference between me and you in the estimated market value of Phoenix Merrill Lynch, it is still a little early to talk about it. After you have read the information in your hands and have a better understanding of the situation of Phoenix Merrill Lynch, it is not too late for us to discuss this matter! However, in view of the current situation in the outside world, I will only give you two days. In two days, I hope to hear more constructive comments!"