Chapter 152 Jiahe's Current Situation and Acquisition Preparations

On September 10, Teachers' Day, Liu Zhou flew directly to Hong Kong.

After Zhong Lifang picked up Liu Zhou at the airport, she took him to the presidential suite of the Peninsula Hotel.

In the room, Zhong Lifang also reported to Liu Zhou some of the situations after she came to Hong Kong.

"Boss Liu, are you coming here this time to take over Jiahe in one fell swoop?"

"I have this idea, but I still need to see the specific situation. You have been here for a few months. What do you think?"

"I think we can wait."

"Tell me your reasons."

Zhong Lifang paused, organized her words and said:

“I came to Hong Kong at the end of May and immediately started to secretly buy Golden Harvest shares.

At that time, Golden Harvest’s share price was just over HK$1 and was about to be delisted.

Although the stock price is low, the liquidity of Golden Harvest stock is also low, so for the sake of confidentiality, we dare not buy up on a large scale.

In more than three months, we have only spent less than 30 million.

I think we can buy some more shares secretly, which will make it easier to make a takeover bid later."

"What is the current situation of Jiahe?" Liu Zhou asked.

"Golden Harvest has a total of 1.3 million shares, each worth HK$4.16, which is a little higher than the price when we first entered the market. The total market value is HK$ million."

"The market value is only over 400 million? Is Jiahe so worthless now?"

"That's right. Its stock price has plummeted since Jackie Chan left in 2002. Plus, the film market in Hong Kong is very bad right now, and Golden Harvest hasn't produced a single movie in nearly three years.

So in the past few years, Golden Harvest’s stock price has been falling, and now it has almost reached its lowest point.”

Despite this, Liu Zhou still feels that Golden Harvest’s market value is too low.

Not to mention other things, Golden Harvest has cinema resources not only in Hong Kong, but also in Taiwan and the entire Southeast Asia.

When the real estate market in Hong Kong was booming, Zou Wenhuai also engaged in real estate under the name of Golden Harvest.

Therefore, some cinemas in Hong Kong, Taiwan and Nanyang are self-operated and have property rights.

Coupled with Golden Harvest's strong distribution capabilities throughout Asia and the United States, its value is definitely more than 400 million.

In response to Liu Zhou's questions, Zhong Lifang said:
“Mr. Liu, although Golden Harvest has its own cinemas, these cinemas are not independent buildings like the previous theaters and can hardly be developed.

Moreover, the market conditions are not good right now, cinemas have basically no business and many are making losses.

As for Golden Harvest’s strong distribution capabilities, Golden Harvest does not even have the production capabilities now, so it is useless even if its distribution capabilities are strong.

Moreover, nowadays, Hong Kong films, except those starring a limited number of people, have little market in Southeast Asia.

So Golden Harvest only has the ability to distribute films, but it has no films to distribute.”

“I see. But I think this is perfect for us. We are lacking the ability to publish.”

“That’s right. After I came to Hong Kong, I also conducted a detailed investigation on Golden Harvest and found that this company is very solid in all other aspects except production.

And in fact, it’s not that Golden Harvest Productions is not good, but after Zou Wenhuai retired, his successors basically had no interest in the film and television industry.

Only his daughter Zou Chongyan cared about her father and tried her best to maintain Jiahe.

But Zou Chongyan was an outsider after all, and had no idea about the twists and turns of the film and television industry. After being cheated several times in succession, she became conservative and even stopped her production business. "

Liu Zhou smiled and said:

"In that case, Jiahe is tailor-made for us."

“That’s right, but it’s not easy to completely acquire Golden Harvest. In 2000, Peter Lam of Media Asia Group once tried to acquire Golden Harvest.

However, he was met with a strong backlash from Zou Wenhuai, who even used his own connections to invite Li Chaoren to act as a white knight, and ultimately prevented Lin Jianyue from succeeding.

If we acquire Golden Harvest now, there is a high possibility that we will be counterattacked by Zou Wenhuai.

Although Zou Wenhuai has retired, he has worked in Hong Kong's film and television industry and business community for decades, and his network of contacts cannot be underestimated.

That’s why I think we should secretly buy some more Golden Harvest shares.”

When Liu Zhou heard what Zhong Lifang said, he couldn't help but fall into deep thought.

Liu Zhou is not worried about Zou Wenhuai alone, but if there is Li Chaoren involved, everyone will have to think carefully.

Li Chaoren's reputation was at its peak at this time, and he was the richest man in Asia for several consecutive terms.

In the mainland business community, he is respected by many as the godfather of business.

Wherever he arrived at a place, the four local teams would come out to greet him.

This is also why his Cheung Kong Industries was able to acquire large tracts of land in the mainland.

Sometimes it’s not him who wants to circle the trees, but the locals begging him to do so.

But they didn't expect that Li Chaoren, the richest man in Asia and the pride of the Chinese people, would be so cruel as to leave the land there and wait for it to appreciate in value.

In Hong Kong, Li Chaoren's influence is pervasive.

He was able to support his youngest son, who was unable to inherit the family property, and become one of the top ten richest people in Hong Kong.

You can imagine his influence in Hong Kong!

If you want to fight against Superman Li in Hong Kong, there is almost no chance of winning.

So if Li Chaoren helps Zou Wenhuai again this time, it will be difficult for Liu Zhou to take over Jiahe by force. But Liu Zhou thought of his past life, when Chengtian acquired Jiahe smoothly, and Zou Wenhuai even took the initiative to sell his shares to Chengtian.

I just don’t know if Zou Wenhuai’s mentality has changed a few years in advance.

"Mr. Zhong, how many shares of Jiahe do we have now?"

"We hold 26 million shares of Golden Harvest, which accounts for about 8% of the total share capital."

"Only 8 percent? That's too little!"

"There's nothing we can do about it, Mr. Liu. Right now, few people are trading Jiahe's stock, and almost no one is buying it.

If we buy in large quantities, it will be easy to be noticed.

So we could only buy shares slowly, but despite this, Golden Harvest's share price still rose slightly."

"I don't mean to blame you. Who are the major shareholders of Jiahe now?"

"The largest individual shareholder is Zou Wenhuai, who holds 21.5 percent of the shares, and the second largest shareholder is Li Chaoren, who holds 12 percent of the shares.

The third is Peter Lam of Media Asia Group, who holds 6% of the shares. As no one was willing to take over, he just left these shares in his hands.

There are also a few individual shareholders with less than 5% of the shares. Because they have not reached the threshold for raising a stake, we cannot find out who they are without alerting them. But I heard that these people are the original founders of Jiahe or their descendants. "

"In that case, Jiahe's shares in circulation on the market exceed 50%?"

"Yes."

Liu Zhou pondered for a while and said:
“You are required to do three things.

First, within two months, we will sell all of our Sohu shares.

Second, we should increase the efforts to acquire Jiahe shares. We should not limit ourselves to it, but also entrust other institutions to acquire them together.

Third, please help me make an appointment with Zou Wenhuai. I want to talk to him."

Seeing Zhong Lifang hesitated to speak, Liu Zhou continued:

"If you have any questions, just ask."

"Mr. Liu, we already have 120 million in funds. Even if we completely acquire Golden Harvest and then delist, we don't have to sell all of Sohu's shares, right?

Since the Internet revival, the stocks of these three portals have been rising every day. It would be a big mistake to sell them all now."

At the beginning, Liu Zhou spent 1.2 million US dollars to acquire 5% of Sohu's shares, which just reached the threshold for raising the stake.

But now, Sohu's stock price has exceeded 80 US dollars, and its market value has returned to its peak, exceeding 2 billion US dollars.

Even if we calculate it based on 2 billion US dollars, 5% of the shares would be 100 million US dollars, equivalent to nearly 900 million Hong Kong dollars.

Combined with the company’s own funds, the total amount is over 1 billion. Even if Jiahe doubles the premium, it can still acquire it completely.

Liu Zhou also knew that it was not cost-effective to sell all of Sohu's shares. Two years later, Zhang Chaoyang won the exclusive online news for the Beijing Olympics, and Sohu's market value once exceeded that of NetEase and Sina.

At that time, Sohu was an Internet giant with a market value of over 10 billion US dollars.

But money is not about numbers, but about converting money into influence, that is wealth.

Therefore, Liu Zhou doesn't feel sorry at all about selling Sohu shares to cash out and acquire Golden Harvest.

Sohu's potential is also the smallest, and Liu Zhou also has other uses for this money. He explained:
"I understand what you mean. If you can successfully acquire Golden Harvest, use the remaining funds to buy Sina shares for me."

"Mr. Liu, are you not optimistic about Sohu?"

“Not really, but I am more optimistic about Sina and NetEase, and the blogs launched by Sina seem to have a closer connection with our film and television industry.

I want to hold more Sina shares and increase my voice in Sina. If the opportunity is right, I am ready to join Sina's board of directors."

In fact, there is another reason that Liu Zhou did not mention, which is that next year, Shanda’s Chen Tianqiao will take action against Sina.

That would be a good opportunity for Liu Zhou to fish in troubled waters.

If he is lucky, Liu Zhou may even be able to take over Sina.

Even if he fails to take control of Sina, it will not be a loss, Liu Zhou can still make huge profits.

"I understand, Mr. Liu."

"Do you still have any questions?"

"Also, if we invite other institutions to purchase Golden Harvest shares together, it may be noticed by the Golden Harvest board of directors soon."

“I know, but we don’t have to be too sneaky, it’s too slow!
I just want to alert the enemy and see the reaction from Jiahe first.

If they react strongly, we will have to make long-term plans. If they react calmly, we will temporarily stop the action and wait until I talk to Zou Wenhuai before making any decisions."

"Mr. Liu, do you think Zou Wenhuai might voluntarily give up the control of Jiahe?"

“I don’t know, but Zou Wenhuai will be 80 years old after the New Year, and Jiahe is in such a dead state now. I don’t believe he has no feelings for Jiahe.

He absolutely couldn't bear to see Jiahe sinking like this, and we just happened to be able to bring Jiahe back to life.

Therefore, I think that as long as Zou Wenhuai does not have Alzheimer's disease, he should let go of Golden Harvest."

"I understand, Mr. Liu. I will arrange a meeting with Zou Wenhuai for you in the next few days."

"We don't need to be so anxious for now. Let's wait until we increase our stake in Jiahe to 15%.

Although we are not afraid that the Jiahe board of directors will know that someone is buying Jiahe shares, we don’t want to make a big fuss about it. We just need to get it done within a month.”

(End of this chapter)