London, headquarters of the Great Eastern Telegraph Office.

Cable & Telecom is a multinational company with more than 40,000 employees and operations in more than 70 countries and regions around the world, and it holds 54% of Hong Kong Telecom's shares.

HKT is one of the most important companies under GTC, and its business includes fixed and mobile telephones, international calls, satellite communications, Internet access services and telecommunications systems.

Judging from the financial statements, Hong Kong Telecom's market value is about 200 billion Hong Kong dollars, its earnings are quite stable and healthy (annual profit of more than 10 billion Hong Kong dollars), and its net assets per share are 3.18 Hong Kong dollars (about 10 billion shares), and its earnings per share have always remained around 1 Hong Kong dollars in recent years.

Hong Kong Telecom's share price has been hovering around 20 Hong Kong dollars for a long time, that is, its price-earnings ratio (the so-called price-earnings ratio is the ratio of stock price to annual earnings) has been around 20 times for a long time (Hong Kong Telecom's shares are more than 20 Hong Kong dollars, and earnings per share are about 1 Hong Kong dollars).

The old duo of Yuan Tianfan and Liang Botao once again worked together to be responsible for the acquisition of Hong Kong Telecom by New Era Group.

The two came to the headquarters of the Daito Telegraph Office, and this was the third time they had come.

For the first time, the board of directors of the Great Eastern Telegraph Company felt very abrupt and was not prepared to sell Hong Kong Telecom, so it did not achieve any success;

The second time, the board of directors of the Dadong Telegraph Bureau had been loosened, and the two sides had tentative contacts, but there were no substantive negotiation results;

This was the third meeting, and before the two left, the boss told the two of them that if this time, Dadong Telegraph Office still had no obvious intention to sell, so he would temporarily cancel the acquisition plan and wait for Dadong Telegraph Office to change the board of directors, and then continue to contact.

Therefore, after the two came to the conference room of the Daito Telegraph Office, they carefully observed the situation.

Yuri, chairman of the board of directors of the Daito Telegraph Bureau, took several directors with him this time, and immediately let the two of them look at each other, knowing in their hearts that the Daito Telegraph Bureau may have prepared to sell Hong Kong Telecom.

Of course, this is a huge acquisition, and I don't know how many waves there are in the middle, and the two don't dare to take it lightly.

At the beginning of the meeting, Yuri pretended to hesitate and said: "Hong Kong Telecom is an important asset of Dadong Telegraph, and we have made great efforts to develop Hong Kong Telecom over the years. ”

Yuan Tianfan and Liang Botao suddenly scolded in their hearts, there is a bullshit effort to develop, the reason why Hong Kong Telecom has today is because it has the franchise of Hong Kong's 'local telephone' and 'international telephone', especially the franchise of 'international telephone', which is the most profitable business.

To tell the truth, if it were not for the expiration of the franchise of 'international telephone' in 10 years, Dadong Telegraph Office might not choose to sell it, because they knew that just like after the expiration of 'local telephone' in 1995, the Hong Kong government immediately attracted competition from several telecommunications companies, so the future of Heung Kong Telecom will also usher in greater competition.

Yuan Tianfan said seriously: "After all, Hong Kong is just a small place with millions of people, and the development potential of the telecommunications market is very limited. However, if Hong Kong Telecom's business development in the mainland fails, it already lacks the 'imagination' of the capital world, and a company without 'imagination' has no great prospects. In addition, the patent term is approaching, and it is more in line with their own interests for Dadong Telegraph to cash out, and perhaps they will make more money by investing in a more imaginative Internet! ”

There is no way, this matter takes the initiative to come to the door to buy, and you have to do ideological work first.

As soon as Yuan Tianfan's words fell, the directors of the Dadong Telegraph Bureau all looked moved, showing expressions of approval.

In the capital market, "imagination" seems to be a more important thing than the actual profitability, and the actual profitability of Hong Kong Telecom is not bad, but the "imagination" it provides to the capital market is already very limited. In fact, HKT's share price has been hovering around HK$20 for a long time, which is the best evidence.

In the past, HKT's status in Hong Kong was equivalent to that of China's China Telecom, which enjoyed exclusive rights. This is something that can provide "imagination" for the capital market, and now this right has been denied by the Hong Kong government by means of redemption. At present, there are as many as nine companies in Hong Kong with telecommunications business licenses, and although Hong Kong Telecom is still the unshakable leader, it will inevitably be under the pressure of competition, so its charm in the capital market will be greatly reduced.

The development potential of the Hong Kong telecommunications market is very limited, and the development of the mainland telecommunications business is a visible growth point. In this regard, Hong Kong Telecom has also made a lot of efforts: it has ceded shares to Hong Kong-listed Zhongtai and Huaxia Telecom, which holds about 10 percent of Hong Kong Telecom's shares, and is its second largest shareholder, in the hope of getting their help to open the door to China's telecommunications market.

However, the hard-line attitude of the management department of Huaxia Telecom did not give Hong Kong Telecom a good result, and without the exclusive franchise and the space for continued development, Hong Kong Telecom lost its attractiveness in the capital market. In addition, Dadong is a British company after all, and there are not many reasons to continue to stay in Hong Kong after 1997.

In fact, the board of directors of the British Great Eastern Telegraph Company has already begun to think about these reasons in the previous two meetings.

Yuri thought for a moment before he said, "I can convince the board of directors to agree to the sale, I wonder what conditions you can give?" ”

Yes, the first step was successful, Yuan Tianfan and Liang Botao said in their hearts at the same time.

Yuan Tianfan said: "We can buy your HKT shares according to the market value, that is, 22 Hong Kong dollars per share, and the payment method is half cash and half stock. ”

In fact, this is also the result of Lin Zuhui's calculations. Because he guessed that the Xiangjiang Hang Seng Index would rise by at least four or five percent this year, and even if Xiangjiang Telecom staggered again, it would not be a problem to rise by two percent, that is, the stock price was 26.5 yuan per share and the market value was more than 265 billion.

As for the issue of stocks, New Era Group is now three times the market value of Hong Kong Telecom, and even if he pays a part of the shares, his holdings will not be diluted much. What's more, there is an opportunity to increase holdings.

Yuri said decisively: "We will not accept stocks, and likewise, we are not satisfied with your offer!" ”

Yuan Tianfan said: "With such a large acquisition, it is impossible not to pay the shares, so we must adopt the shares that pay half!" As for the price, Hong Kong Telecom's stock price has been like this for a long time, which means that it has no prospects in your hands, so our quotation is reasonable. ”

After a brief confrontation between the two sides, neither side was willing to concede a step.

Yuri smiled and said, "In that case, then you can ask your boss and talk to us again!" ”

The implication is that today is over!

In fact, Yuri has already thought of a way to bring in new competitors to increase the purchase price and the percentage of cash paid.

Of course, Yuri took it for granted, Lin Zuhui had thought beforehand that there were almost no opponents who could compete with the New Era Group.

Singapore Telecom?

With a market capitalization of only 200 billion Hong Kong dollars, how much cash can it take?

The New Era Group is directly half cash and half stock, and this payment ratio is quite high.

Li Zekai's yingdong?

Don't be kidding, Yingdong is still a child, and she hasn't even made it public.

Even if this acquisition is delayed until the second half of the year, without the profit of 'Cyberport', how can it increase its market value to 60 billion?

Hutchison?

No, British Telecom has not been sold yet, and Hutchison Whampoa is also enough; Unless Li Chaoren shows the determination to change the previous 'focus on cash flow and debt' and go crazy, it will be possible.

So, at this time, there are really no competitors.

The most difficult part, on the contrary, was to persuade the Great Eastern Telegraph Company to sell Hong Kong Telecom.

Yuan Tianfan said: "Okay, let's leave first!" ”

The two also knew that the Dadong Telegraph Bureau would not easily hand over the chips in their hands, and the hole cards of the New Era Group had not been released, so there was no need to worry.

.......

Monday, January 4.

On the first working day after New Year's Day, Lin Zuhui came to the headquarters of New Era Group in a very good mood. Although the mood is good, the body seems to be a little 'weak', and the body is a little unbearable for three consecutive days.

Of course, his 'virtuality' is not really virtual, it can only be said that he is 'not at his peak'.

When he came to the office, Lin Zuhui leisurely read the newspaper and looked at the computer.

In fact, Lin Zuhui doesn't have much work now, even if he sits in the office and drinks tea every day, the company can develop steadily. Although he does not yet have a son who can share the burden for him, his company has long been a 'professional manager' system, and he is more of a 'spiritual symbol', and he can sit back and relax if he gives some instructions appropriately.

When he has more than 200,000 employees (all the companies under his umbrella), he has no way to manage the company's specific affairs himself, otherwise he will have to die.

In the morning, Liang Zhenxun came to Lin Zuhui's office.

"Boss, all bank stocks in Europe and the United States have been emptied, and a total of 45.8 billion Hong Kong dollars have been withdrawn, with a total yield of about 430%."

Lin Zuhui said with satisfaction: "Very good rate of return!" The highest should be Citibank, right? ”

Liang Zhenxun nodded and said, "Well, we spent $200 million back then, and this time we returned $3.02 billion, almost 15 times more." ”

Over the years, Citibank has paid a lot of dividends and has also bought Citibank shares, so in the end, after the merger of Citigroup and Traveler, New Era Group still owns 1.52% of the shares. And this year, Citibank's market capitalization is around $200 billion, and it is natural that it has made so many profits.

】

Citibank's stock may still rise, but it is inevitable to cash out early, after all, New Era Group needs to spend money.

Including the shares of Microsoft (1.5%) held by New Era Group, it will also be cashed out from July this year, and it is expected to be 7 billion US dollars (55 billion Hong Kong dollars) if it is cashed out by the end of the year; There are also Vodafone's shares, which can also cash out more than 10 billion Hong Kong dollars.

As for Sony's shares, you can choose to cash out more than 30 billion Hong Kong dollars after the millennium.

Stocks alone, together with this cash-out, are 150 billion.

If you count the sale of the British telecommunications industry, I am afraid that it will have to add 80 billion.

The 'extra' cash flow of 230 billion can be called the cash flow of the world's top groups, so it is not an exaggeration to say that the market value of more than 600 billion is not an exaggeration at all, and it can be said that it is already underestimating the assets of the New Era Group.

There is definitely no problem with 1,000 billion at the end of the year, and the Hang Seng Index is expected to rise by about 5% this year!

"How much cash does the company have on its books?"

"More than 65 billion!"

"Well, we will continue to vigorously develop shipping, hotels, and shopping malls this year, and cash flow will also be needed to acquire Hong Kong Telecom."

"Okay, I'll take care of the finances."

When Liang Zhenxun heard this, he actually wanted to ask a question in his heart: "As a major shareholder, don't you want to pay dividends?" ”

After all, companies like Henderson and Sun Hung Kai take out a large proportion of funds for dividends every year, and their own bosses are not very active in dividends.

In 1997, it made a profit of more than 70 billion yuan (the sale of property and gold futures accounted for more than 40 billion yuan), and the dividend of the New Era Group at the beginning of 1998 was less than 8 billion.

It seems to be the company with the most dividends in Xiangjiang, but in fact, it is equivalent to only taking out more than 10% of the annual profit dividend.

Last year (1998) the profit is expected to be about 75 billion, and this year's dividend seems to be less than 10 billion.

Thinking of this, Liang Zhenxun actually understands that the boss is really not bad for money. If you can make so much money financially for the company, then you must be making a lot of money.

.......

In the past two days, Yuan Tianfan and Liang Botao returned to Hong Kong to report the situation to Lin Zuhui.

After listening to the attitude of the Dadong Telegraph Bureau, Lin Zuhui obviously thought.

Hong Kong Telecom is a lucrative asset, although after the acquisition by Li Zekai in the previous life, the market value of Yingke plummeted from 500 billion to more than 20 billion; But in fact, after the merger with Yingke, Hong Kong Telecom was spun off after 2010, and its market value has been fluctuating around 100 billion.

On the whole, this deal was messed up by Li Zekai, if it weren't for his Lao Tzu to come forward, the merged PCCW, only hundreds of billions of debts, can be dragged down all the time, after all, the annual interest is tens of billions, then PCCW except for Hong Kong Telecom's profits, other businesses are not profitable at all.

So how can it profit from this transaction if it is a new era group?

Soon, Lin Zuhui had a plan for the 'capital market' in his heart, but he didn't say it for the first time.

"Well, since the Dadong Telegraph Bureau has already moved, then they must want to introduce competitors next, so let's wait to see the move! Of course, Hong Kong Telecom's premium is 10%~20%, and we can also make a move; Moreover, more cash flow is not impossible to consider, after all, we can borrow a lot. ”

Yuan Tianfan and Liang Botao looked at each other for a moment, and then Yuan Tianfan said: "It is feasible to acquire an asset with a huge market value like Hong Kong Telecom, and a premium of less than 10%. ”

He knows that the boss will make money, but he is also the one who will spend money, so remind him.

Lin Zuhui said with a smile: "That being said! But the Daito Telegraph Office may drag on, after all, it is now the seller who takes the initiative. This year is the year of the Internet explosion, and the telecommunications industry is also rising, so I think it is entirely possible for Heung Kong Telecom to rise to a market value of more than 260 billion yuan. Think about it, should we take the initiative to raise the price, or wait until we are more passive? ”

That's the benefit of knowing what's going on!

Assuming that the market value of Hong Kong Telecom exceeds 260 billion in the second half of the year, the purchase price of each consortium will not be at a premium, after all, this is already inflated, so that the consortiums participating in the bidding are all in the same running line.

But if the New Era Group is willing to give the price for the second half of the year, then other consortiums may not follow, and Dadong Telegraph is more willing to accept the premium.

In fact, it is true that the Daito Telegraph Company will not be in a hurry to sell at a low price, and they will soon make a noise and introduce new competitors. Even so, they still take the initiative and can wait for the price to sell, and are not in a hurry to make a deal, unless the price is very favorable.

When Yuan Tianfan and Liang Botao heard about this year's financial situation, there was no doubt, the boss said that this year's market was this year, and it must not be wrong. After all, this is a fact that many people will recognize.

"Okay, we got it!"

Lin Zuhui also said: "If this acquisition can be completed in one or two months, New Era Group can reduce the acquisition cost in the capital market, so you should pay attention to my opinion." ”

Although the two of them wanted to know what to do, after all, the first step of the acquisition had not yet been reached, so it was naturally not good to ask now.

Liang Botao said at this time: "Boss, if the cash ratio is increased, then it is very important to obtain the support of the mainland government. First, Huaxia Telecom holds 10% of Hong Kong Telecom; Second, the Bank of China can provide loans. ”

Lin Zuhui said confidently: "There is no reason why they don't support it!" Of course, it depends on the situation in the future! ”

"Okay!"

In fact, Lin Zuhui also intends to use loans as the main source of funds for this acquisition, so banks can provide loans at that time. He is ready to borrow $10 billion for the acquisition.

The group debt of the entire New Era Group is only 20 billion Hong Kong dollars, which is indeed a very low debt for a group with assets worth nearly one trillion yuan.

There is no way, a lot of cash has been cashed out in recent years, so that the cash flow is very sufficient.

If it weren't for such a large acquisition, there would really be no chance to raise the debt!