Singtel and New Era Group are not destined to compete for 'Hong Kong Telecom', and New Era Group has obtained $10 billion in loans from Hua Xia Bank, HSBC, Barclays Bank, and National Bank of Paribas in a short period of time.

The collateral for this loan is the acquired 54% stake in Hong Kong Telecom, of course, this fund also has a condition, that is, it can only be used to acquire Hong Kong Telecom.

On January 21, New Era Group proposed a very tempting plan: for every two shares of Hong Kong Telecom, one share of New Era Group shares could be exchanged for one stock of New Era Group, and $10 billion in cash would be spent; According to this plan, the market value of Heung Kong Telecom's acquisition is HK$250 billion.

This plan is very much in line with the requirements of Tai Tung Telegraph, which is eager to sell Hong Kong Telecom for cash, and raises the purchase price by another HK$30 billion.

At this point, Lin Zuhui, Yuan Tianfan and others were already in the mood of victory, waiting for the good news from the Dadong Telegraph Office.

Because Lim Zuhui believes that Singtel cannot afford this price, and even no consortium in the world can afford this price.

And Lam Cho-fai must buy Hong Kong Telecom, even if it is at a high price, because he is the boss of Hong Kong, where foreign consortia, even local consortia, are allowed to challenge his authority.

Fight for honor!

Singapore Telecom's headquarters.

In a time of despair, Li Xianyang ushered in a ray of light.

"Mr. Murdoch, you're welcome!"

It turned out that it was media tycoon Murdoch who took the initiative to come to the door and asked for cooperation.

"Haha, Mr. Li, I'm glad to see you again!"

The two sat down on the sofa in Li Xianyang's office, and Li Xianyang already felt in his heart that Murdoch came to visit at this time, and it must be for Hong Kong Telecom.

Sure enough, Murdoch quickly said: "Mr. Li, as far as I know, the New Era Group has already quoted a sky-high price to the Great Eastern Telegraph Office, how does Singtel respond to this?" ”

Li Xianyang said frankly: "We are helpless, because we can't afford that price!" ”

What price, the Daito Telegraph Office has already given a hint, but it is not specified.

Murdoch said seriously: "I am also very interested in participating in this acquisition, and if Singtel wants to, I can provide $1 billion in cash to buy new shares issued by Singtel." ”

It is eye-catching, because not only Singtel received $1 billion (4% of the new shares are expected to be issued), but more importantly, Murdoch, a media tycoon, joined Singtel, which also makes Singtel shares more valuable and more 'imaginative'.

"Well, we're willing to make an alliance, and thank you Mr. Murdoch for your help!"

"Haha, I'd love to see Singtel beat New Era Group."

Murdoch smiled very sinisterly, because he had a 'feud' with Lin Zuhui.

In that year, Lin Zuhui "led him into the game" Asia Satellite TV Group (Star Media) and teamed up with the Li family in Hong Kong to sell him 50% of the shares at a high price; The price is high, but the important thing is that he found out that he was being taken advantage of later. ATV Group used his connections and experience to open up satellite TV channels in many Asian countries, and then vigorously developed 'Hong Kong Culture', although the two each accounted for 50% of the shares, but Murdoch gradually found that ATV Group's voice in Star Media was too great.

The two forces later clashed constantly, but ATV Group pressed News Corp to the death by virtue of its 'license'. Therefore, Murdoch has the mind to cash out.

Originally, I hoped that Western culture would be promoted in Asia, but in the end, it was found that the development of 'Hong Kong culture' in Asia was achieved.

Therefore, the 'feud' between the two sides was thus concluded.

Over the weekend, the news kept coming back to Hong Kong, which made Hong Kong people worry.

In order to improve its cash acquisition capabilities, Singtel has secured a capital injection from media tycoon Murdoch's News Corp., which has invested US$1 billion in cash to take a 4% stake in Singtel, and the two sides have cooperated to develop Internet, TV and mobile phone businesses in Singapore, making the acquisition more international.

With this US$1 billion worth of chips and a stronger business backed by the capital injection, Singtel Chief Executive Gregorian flew to London to personally present a new acquisition proposal to the board of directors of Great Eastern in an attempt to turn the tide.

The exact plan is unknown, but the variables have grown. The increase in the cash ratio, coupled with the stability of Singapore Telecom's business, and the addition of News Corp's stake in it, will be very attractive to Dadong, which has always been conservative.

At the same time, News Corp.'s press release made no secret of its efforts to assist Singtel in its bid for a stake in Hong Kong Telecom, a high-profile action that shows its determination to thwart New Era Group's winning the championship.

It is said that the reason why Murdoch intervened was because he found out that buying satellite TV was actually "buying expensive goods", and he had been suppressed by the ATV Group, so he had always been obsessed, and this time he finally found a good opportunity to bring Lin Zuhui to the army.

On the other hand, Singtel spread a smokescreen saying that it was preparing to file a lawsuit in the Hong Kong courts, alleging that HSBC Holdings, one of the syndicates, had access to confidential information about Singtel's quest for a merger with HKT while acting as an adviser to HKT, but had also taken out loans for New Era Group, which it considered to be a violation of the conflict of interest clause.

When a listed company is involved in a major acquisition or merger project, it generally engages a financial adviser. In this takeover battle, Singapore Telecom and New Era Group, as well as Hong Kong Telecom's parent company, Dadong Telegraph Co., Ltd., have hired financial advisers, and Hong Kong Telecom has hired additional financial advisers.

According to the Hong Kong Code on Takeovers and Mergers (Takeovers) and Mergers, the Board has the power to engage independent financial advisers in the interests of minority shareholders as there are shareholder interests involved in a takeover or merger. In practical situations, the primary responsibility of a financial advisor is to bargain with the client for the best possible benefit. HSBC's role in the battle for Hong Kong Telecom was to analyse the acquisition proposals of Singtel and New Era Group for HKT's independent directors.

The purpose of Singtel's move is very clear, which is to sabotage the loan plan of the New Era Group and catch it off guard.

In order to smash the rumors, the Hong Kong government and even the central government have made it clear that they will not intervene, after all, Hong Kong's telecommunications market has been opened. The Hong Kong government has repeatedly said that mergers and acquisitions are purely commercial issues, and that what it has to do as a Hong Kong government, which pursues an "active non-intervention" policy, is to protect the interests of all Hong Kong citizens. Hong Kong's Chief Secretary for Administration, Anson Fong, said that the government had no opinion on which company HKT would be acquired, and that it was concerned about maintaining fair competition across the telecommunications services and that the licensees could meet the licensing requirements, and that there were no political factors involved in the merger.

In the face of Singtel's provocations, New Era Group cannot remain indifferent.

On January 26, New Era Group announced that it had made a profit of 46 billion Hong Kong dollars in overseas securities last year, and after cashing out, it also held high-quality securities worth about 70 billion overseas.

This news seems to have no impact on the acquisition, but it is a fatal blow to Singtel.

New Era Group spread a message through the media: once New Era Group resumes, the stock price will soar again, and the shares in the hands of Dadong Telegraph will also gain more value in the future.

It is equivalent to raising the purchase price in disguise.

On the same day, the halls of major securities companies in Xiangjiang asked when New Era Group and Hong Kong Telecom would resume, which was simply bought and earned.

"The cash of the New Era Group is really inexhaustible, 80 billion last year, more than 100 billion this year, this kind of stock does not rise to 1 trillion market value, I am sorry for the rich assets."

"Yes, the company led by Lin Zuhui has the world's top development speed, and if you buy it with him, you will make money steadily,"

The news reached London, and Yuri urgently convened a board meeting.

"At present, the quotations of both parties have come out, let's discuss the ownership of Hong Kong Telecom!"

The directors had already laughed and were in a very relaxed mood.

Director A said, "It's a simple choice! The price offered by the New Era Group is higher, and the cash payment is more, so it is natural to choose the New Era Group. ”

Director B nodded and said, "The price offered by New Era Group is 10 billion higher, and now whether it is the amount of cash payment or the long-term value of the other party's shares, New Era Group wins." ”

Director C couldn't wait to say: "Yes, we take $10 billion to invest in the Internet industry, and after a while, I'm afraid we can cash out $10 billion in the shares of the New Era Group in our hands, what a wonderful thing!" ”

"Haha"

Yuri was also very happy and said, "What a wonderful deal, we have brought a huge profit to the shareholders of Daito Telegraph. Okay, now it's time for you to vote. ”

On January 28, the 'Hong Kong Telecom Takeover War', which lasted for nearly a month, finally came to an end, and Dadong Telegraph announced that it would reach a formal agreement with New Era Group.

For a time, the people of Hong Kong were jubilant.

Hong Kong Telecommunications Building.

On behalf of New Era Group, Lin Zuhui signed a formal transaction contract with Yuri, chairman of the board of directors of Dadong Telegraph Company.

After signing the name, Lin Zuhui said with a smile: "Thank you Dadong Telegraph Bureau for its contribution to Hong Kong's telecommunications industry over the years, and I hope we will have more cooperation in the future." ”

Yuri said with great satisfaction: "Mr. Lin is really happy to do things, and I am also very eager to see the cooperation between Dadong and you. ”

For this transaction, Lin Zuhui does not feel that it is expensive to buy and a loss.

New Era Group paid a price of 10 billion US dollars, and 7% of the new shares, almost 130 billion Hong Kong dollars. But he had to spend this money, otherwise Hong Kong Telecom would have been controlled by Singapore capital.

Dadong Telegraph Office has indeed made a lot of money, but others have indeed made contributions to Heung Kong Telecom for 100 years, what is it to make this money!

As for whether the New Era Group is expensive?

It depends on how the New Era Group operates 'Hong Kong Telecom' and whether it will give Hong Kong Telecom 'imagination'.

The meeting room of the New Era Group.

Lam Cho-fai convened a group of senior executives to consider the future of Hong Kong Telecom.

After so many years in business, he has always been an acquisition + reorganization business, parallel style.

If it is acquired at a high price and not fully developed, then it will definitely be at a loss.

With 1 million mobile phone subscribers and 80% of Hong Kong's fixed telephone network, HKT has a solid foundation. Hong Kong and Singapore are competing for information markets other than Japan, which is why the new era must be in place today.

"Do you have any suggestions for the new management of Heung Kong Telecom?" Lin Zuhui asked.

Since we want to take advantage of the future of the Xiangjiang Telecommunications War, it is natural to have a leader with a global vision.

Yuan Tianfan immediately said: "I have a candidate for CEO of Heung Kong Telecom, that is, the former director of the Telecommunications Authority, Averon, who has made Heung Kong Telecom's ability to break through geographical restrictions and develop overseas during his tenure. If it weren't for the localization of post-97 high-ranking officials, he would not have served in office. ”

Lin Zuhui said: "Okay, you invite him to be the CEO for me!" ”

He naturally knew these people, so he immediately agreed.

Then, Lin Zuhui said: "The acquisition of Hong Kong Telecom by our New Era Group has also caused some gossip, and you want to merge Times Telecom and Hong Kong Telecom as soon as possible." ”

If it is an ordinary consortium, it will inevitably be criticized by the media and the government, after all, the New Era Group holds two 'licenses', which is equivalent to a monopoly. However, Lin Zuhui's status is transcendent, and this time it is a big battle against Singapore capital, so there are naturally a lot fewer voices.

So, as long as the two companies are combined as soon as possible, everything will not be a problem at that time.

"Okay!"

Lam continued: "I didn't want to do broadband Internet service, but now that HKT wants to go out of Hong Kong, it is bound to do this business. ”

Yuan Tianfan said: "We have too many advantages to do wide Internet services, after all, boss, you are both an Internet giant and a cable TV giant, technology and content, coupled with the network of Hong Kong Telecom, can be called a perfect match." ”

Lin Zuhui nodded and said: "The imagination in this is very huge, and we will discuss it later after the integration of Times Telecommunications." ”

Singtel's unsuccessful takeover of HKT was seen by most media and academics as a failure. However, Dr Wang Kangmao, from the Department of Financial Accounting at the National University of Singapore, believes that Singtel's exit from the acquisition is a wise decision for the following reasons:

First, the purchase price of US$32 billion is too high, and Hong Kong Telecom's traditional telephone business has declined in recent years, and the company's profitability has also declined. Rather than spending a huge amount of money to acquire Hong Kong Telecom, it is better to directly establish strategic alliances with ChinaAMC-related broadband business companies.

2. In the past, the management of Hong Kong Telecom had made up its mind to cut costs and planned to cut the salaries of its employees by 10 percent, but it caused a strike by all employees, and the Hong Kong government intervened to make the salary reduction motion abandoned.

3. Due to the huge amount of cash required for the acquisition, a considerable proportion of it needs to be exchanged for shares, but Singtel's circulating funds account for only 20%, and if Dadong requires cash, Singtel will be even more difficult to bear.

Fourth, Hong Kong's telecommunications industry has been opened up, there are 9 telecommunications companies, and Hong Kong's telecommunications monopoly position has been lost. Singtel has the strength and management experience, and will have many opportunities to enter the telecommunications market in China at a lower cost and in a lower way.

Through Dr. Wang Kangban's analysis, we can also understand the problem that the new era will face after the acquisition of HKT, that is, how to develop HKT into more value.

(End of chapter)