1. Jeff Bezos, after receiving the popular takeover offer, went into a big rage in the board of directors.

But then, he still needs to calm down and find a strategy to deal with it as soon as possible to save his company!

Lin Feng is the world's top richest man, and Fengxing Group is also an Internet supergiant company.

Their takeover offer is no joke......

Bezos has learned from the side that the attitude of many institutional shareholders who hold Amazon shares is inclined to accept this acquisition!

After all, the terms of the takeover offer given by Fengxing are indeed attractive to many institutional shareholders:

Fengxing proposed the acquisition in the form of "cash + stock", and the bid was 1 share of Fengxing stock + $38 in cash, in exchange for 2 Amazon shares.

According to the stock price of $96.8 per share on the day of the popularity, the bid of the popularity is equivalent to the acquisition of Amazon at a price of $67.4 per share, which is 60% higher than Amazon's stock price of $41.8 on the same day!

Amazon now has a total share capital of 416.8 million shares, and the total price of the acquisition will be as high as $28 billion.

And because of the continuous plunge in the stock price in the past week, Amazon's market capitalization is now only $17.5 billion.

It can be said that if you only look at the numbers, the popular acquisition offer is still relatively sincere in the current situation......

But this price is simply an insult to Bezos!

Fengxing is taking advantage of the fire to rob!

You know, just a few months ago, Amazon's stock price was still above $80, with a market capitalization of more than $33 billion!

It's all a damn financial crisis that makes it all terrible!

Bezos felt extremely depressed, and he never imagined that Lin Feng would hit his Amazon with his idea at this juncture of the financial crisis.

Even if you have been popular for the past two years, the two of us have no grievances in the past, and there is no enmity in the near future, and there is no competition in the business......

Why bother?

Why bother?!

…………

Bezos calmed down and immediately set about laying out countermeasures.

First, he aligns ideas at the board level and across the management team.

I have to admit that since the founding of Amazon in 1995, Bezos's status and influence in the company as the founder and spiritual leader are deep-rooted.

For example, Patty Stonesifer, the most senior director on the board, a former Microsoft executive, CEO of the Bill & Melinda Gates Foundation and a 10-year member of Amazon's board, is a staunch supporter.

She often says, "Bezos was at the center of everything from the beginning, he was born a leader and will be a great leader among leaders." ”

And almost all of Amazon's management are his henchmen.

For example, Jeff Ilke, the number two person in charge of the global consumer department, Andy Jassy, who heads the AS (cloud computing) department, and Jeff Blackburn, who heads the content, advertising and M&A departments, etc.

These people are all old people who have been in the Amazon for nearly 10 years, and they are worshipful and loyal to Bezos.

They have expressed their firm support for Bezos' decision and rejected the popular acquisition.

After stabilizing the internally, on November 18, Amazon CEO Bezos announced that the board of directors had decided to reject the acquisition offer put forward by Fengxing after discussion.

Soon, Amazon also hired JPMorgan (JPMorgan Chase) as Amazon's investment consultant, and JPMorgan CEO and chairman Jamie Dimon (Jamie Dimon) is a longtime friend of Bezos.

JP Morgan will work with Amazon's legal counsel to develop Amazon's reverse takeover strategy.

At the same time, in the Wall Street Journal and other media, Amazon also began to hit back at Fengxing's public opinion, saying that Fengxing's acquisition lacked sincerity, and questioned the source of funds and intentions of Fengxing's acquisition.

At this moment, public opinion in the United States became lively.

At a time when the financial crisis was in dire straits, the market was full of pessimism, and the original Wall Street bigwigs such as finance, banking, and insurance were all in trouble, the acquisition and defensive battles of the two Internet companies, Fengxing and Amazon, obviously brought new vitality and passion to the US capital market during this period!

Goldman Sachs and JP Morgan, the two major investment banks, also seized such an opportunity, showed their skills, and started a big battle with all kinds of means, and the legal war and public relations war were in full swing!

In the first round, it looks like you come and go, and you don't know whether you win or lose.

…………

In the next second round, Lin Feng made another move.

First, raise the offer:

On November 20, Fengxing Group announced that it would increase the purchase price of Amazon:

The new bid is 1 share of Popularity stock + $42 in cash for 2 shares of Amazon. On the same day, Fengxing's stock price was $103 per share, and this offer raised the purchase price to $72.5 per share, while Amazon's stock price was $48.26 per share on the day, and Fengxing's acquisition premium remained at 50%.

The total purchase price rose to $30.16 billion!

Second, differentiation and disintegration:

It is not surprising that the board of directors and management unanimously expressed their support for Bezos, and it would be too much to underestimate him if an American Internet giant and man of the year like Bezos could not even handle the board and management.

For 12 years, Bezos has not been the spiritual leader of the Amazon for nothing.

However, there is a conflict of interest between the board of directors and shareholders.

Theoretically, the goal of management (the board of directors) is to create maximum economic benefits for shareholders, and this is the fiduciary duty of the board of directors as an agent.

But in reality, each director on the board of directors can be said to have their own agendas. Directors want to stay in the chair of directors, they want to have a voice in the company, and they want to keep their current high-paying jobs. However, after the acquisition, it was necessary to make a compromise. In order to prevent their throne from being snatched away, the board of directors sometimes prefers to turn down the opportunity to make a small fortune (since directors generally hold shares).

But the interests of shareholders are not the same.

Shareholders are investors, and there are only two ways to make money. First, buy low and sell high, and second, take dividends.

In an acquisition, there are buyers who are willing to pay a lot of money for shareholders' shares, and shareholders are of course the happiest.

From the perspective of shareholders, most of the purchase price proposed by Fengxing this time is relatively satisfied: $42 in cash is close to Amazon's stock price, not to mention that it can also exchange 2 shares for 1 share of Fengxing shares, you must know that Fengxing stock has now risen to $103 per share, but now in the financial crisis, one of the stocks with the highest appreciation potential!

Moreover, Fengxing has again increased the amount of cash acquisitions, which can increase the credibility of the acquisition and win the support of "arbitrageurs".

Both Goldman Sachs and Fengxing realized that Amazon's management had a big incentive to block the takeover, but Amazon's shareholders had a big incentive to get the deal done.

As a result, Fengxing and Goldman Sachs began to conduct public relations with Amazon's institutional investors around the world, especially in New York, which led to the approval of many institutional shareholders for the acquisition plan.

At the same time, Fengxing also made a public relations response in the media:

On the one hand, accusing Amazon's existing management team of the strategy that has been going on for nearly 10 years has damaged the interests of the majority of minority shareholders and needs to be adjusted and improved.

On the other hand, he also expressed respect for Bezos's contribution to the development of e-commerce, and promised that even if the acquisition is successful, he will continue to hire Bezos as the company's CEO to dismantle Amazon's internal and unanimous resistance beliefs.

As for the source of funds for the acquisition blamed by Amazon, Fengxing made public: most of the funds came from Fengxing Group's own cash reserves, and the other part was supported by banks including Citigroup and UBS.

He also said that Fengxing is a public company listed on the New York Stock Exchange, and it strictly abides by the requirements and norms of the SEC in terms of finance, and there is no "red political money" as speculated by Amazon.

Subsequently, on November 28, Fengxing Group dropped a depth charge: in a document filed with the SEC, Fengxing had acquired 18.26% of Amazon's shares from some of Amazon's original shareholders through an agreement acquisition.

Because Amazon does not have a two-tier shareholding structure, Bezos, the largest shareholder, holds only 21.2% of Amazon's shares.

In other words, Fengxing Group has become the second largest shareholder of Amazon!

In the second round, the Fengxing Group took the lead.

…………

The news that Fengxing acquired 18.6% of the shares shocked Bezos!

He has obviously communicated with all the institutional shareholders and said hello......

18.6% of the shares is not a small number, 77 million shares, only those fund companies and institutions that hold a large number of shares, can come up with so many shares in such a short period of time.

Sure enough, these investors are mercenary...... Unreliable!

Bezos immediately launched a tough counterattack:

On November 29, Amazon CEO Bezos announced that the board of directors continued to reject the takeover bid of Fengxing Group, and at the same time launched a transitional rights plan ("Poison Pill Plan":

Once an unapproved party acquires a large stake (usually 10% to 20%) in the target company, the poison pill program is set in, causing the market to flood the market with new shares. Once the poison pill plan is triggered, all other shareholders will have the opportunity to buy new shares at a low price. This greatly dilutes the acquirer's equity, which in turn makes the acquisition costly, thus achieving the goal of resisting the acquisition.

Amazon announced that under the plan, each shareholder of record on the date of confirmation of the shares (November 10, 2008) will receive one share option for each common share held by the shareholder. For every 1 share held by existing shareholders, they have the right to purchase 5 shares of Amazon common stock.

At the same time, Amazon disclosed in an SEC filing that its possible follow-up plans include: adopting staggered board elections, recapitalization/restructuring, management initiating leveraged buyouts, selling company assets, and finding a third party ("white knight"), showing its determination to keep Fengxing Group out of the door at all costs!

However, for Fengxing, which has already acquired an 18.6% stake, the number of countermeasures has increased considerably.

On the same day, Fengxing immediately responded:

The plan is to reduce the number of seats on Amazon's board of directors from 11 to 6 through proxy competition, and require the placement of no less than 2 seats on the board of directors of its own company based on the equity holdings.

Fengxing also filed a lawsuit in court against Amazon's poison pill measures, arguing that Amazon's board of directors had artificially created an obstacle to the free flow of capital, and accused the board of violating its fiduciary duty to shareholders by restricting Fengxing's rights as a shareholder.

At the same time, Fengxing has also accelerated the pace of surreptitiously acquiring Amazon shares from other shareholders.

In the third round, the two sides were tied and temporarily locked in a stalemate......

…………

The takeover battle that took place in November 2008 was extremely exciting and undulating.

Many Wall Street investment banks, law firms, public relations firms, the media, and even the interest groups and politicians behind them have all been stirred up, taking turns to express their opinions and opinions, and using all means.

The people who eat melons all over the world are watching the excitement on the side, and it feels like a big show!

In fact, after several rounds of this acquisition, at this stage, basically the two parties have realized each other's determination and strength.

Next, how to end it depends on Lin Feng's means and wisdom......