In East Hampton, at the end of New York's Long Island, a black Mercedes-Benz sedan drove into the coastal estate. The driver opened the door, and Warren Buffett put the prospectus of Eagle Reiter, which he had been reading along the way, into his carry-on briefcase.
After getting off the car, Girl A, wearing a black OL suit, was already waiting. She greeted Buffett politely and made a sign of please.
The two entered the villa and came to a reception room on the east side of the villa.
Just after entering the door, Buffett immediately heard the sound of women playing, even though the distance was a little far away through the floor-to-ceiling windows. He looked up and saw a pool full of fragrance not far outside the villa. He couldn't count how many young people there were at a glance. The girl filled an open swimming pool with a length of 20 meters and a width of 10 meters and the surrounding areas.
Even though he has never had a preference in this area, Buffett's mood inevitably fluctuated when he looked at the scene not far away, and he couldn't help sighing. A certain person who had obviously just climbed out of the pool was being surrounded by a group of girls. The young man wiping his body is just ridiculous.
Simon, who left the swimming pool, did not go directly to the reception room, but went to the next door.
After a while, when Girl A brought Buffett coffee, Simon had already put on a slightly more formal shirt and trousers and walked in. If it weren't for his wet hair and slippers on his feet, it would be hard to tell that he came from the swimming pool. .
After shaking hands with Buffett and signaling the old man not to get up, Simon sat down on the sofa next to him and asked with a smile: "Warren, how are you doing?"
Buffett nodded: "Not bad."
I didn't ask how Westeros was doing. Look outside, why bother asking
Moreover, Buffett's side is actually not very good.
As usual, Berkshire Hathaway held another annual shareholder meeting in early May. Compared with the once highly sought-after situation, this time Buffett faced more and more difficult questions from investors at the shareholder meeting. Basically, All of them focus on his neglect of investment in new technology fields.
Buffett is a very determined person and will not easily change his decision due to external pressure. However, as a result of years of hard work, it is impossible for him to ignore the changes in Berkshire Hathaway's stock price. Because at last month’s shareholder meeting, we once again stated that we would not invest in technology stocks without looking down on the situation. In this more than a month, Berkshire Hathaway, which has been somewhat sluggish relative to the broader market in recent years, has Wei's stock price even fell.
Over the years, Berkshire Hathaway's stock price has actually experienced many ups and downs. However, previous downward trends were basically due to the sluggish market. The current situation is that the entire market is doing well, but Berkshire Hathaway is bucking the trend and falling. If this situation continues to develop, Buffett is somewhat worried that unforeseen surprises will occur.
Buffett was struggling with this matter on his way from Manhattan to Long Island.
Simon actually noticed Buffett's worried expression, took a sip of the coffee given by Girl A, and said without further nonsense, "Well, Warren, let's talk about ABC directly."
Today is June 17th, Saturday.
Just yesterday, Daenerys Entertainment's acquisition team once again held a three-hour secret consultation with Metropolis ABC Group executives, basically discussing all aspects such as department adjustments, executive changes, and debt consolidation after the merger. The intention was reached.
Even for Daenerys Entertainment’s acquisition model of Metropolis ABC Group, the two parties have initially finalized the payment method of cash and stocks. Daenerys Entertainment has also given quite loose conditions. Metropolis ABC Group shareholders You can freely choose the proportion of cash or stocks, including all-cash payment or all-stock payment.
The only difference is the transaction price.
According to yesterday's closing price, Metropolis ABC Group's current share price is around US$145. The company's total share capital is approximately 122 million shares, with a market value of US$17.6 billion.
Metropolis ABC hopes to obtain a transaction price of US$180 per share, equivalent to a valuation of US$21.9 billion.
However, the highest offer Daenerys Entertainment is willing to give is US$172, equivalent to a valuation of US$20.9 billion.
There was exactly a US$1 billion difference between the two sides' bids.
The quoted price of US$172 is a premium of 18% compared to the current stock price, which seems a bit low, but the main reason is due to the recent rise in stock prices driven by the news that Daenerys Entertainment Group is about to acquire a television network.
Daenerys Entertainment Group's quote is mainly based on Metropolis ABC Group's share price of around US$130 when the merger plan was just launched. Calculated in this way, the premium of US$172 has reached 32%, which is already a very generous offer.
If Metropolis ABC's offer of $180 is a premium of close to 40%, Simon will never accept it.
It's not that Daenerys Entertainment can't afford such a price, but everything has a limit. TV networks are no longer a growth industry, and this transaction is not a hostile takeover. The maximum premium will only be about 30%. If Simon is taken advantage of with his wealth this time, then the entire Westeros system will be slaughtered as a fat sheep again and again in the future.
Simon went straight to the topic, and Buffett did not beat around the bush and said: "Simon, I think the price of $180 is very reasonable, it is only a 24% premium. What's more, based on Daenerys Entertainment's price-to-earnings ratio, the cash plus stock trading model, You are taking great advantage."
Ignoring Buffett's other premium calculation method, Simon leaned on the sofa, rubbed the cup in his hand and said: "Warren, why don't we assume what will happen if Daenerys Entertainment gives up the acquisition of ABC?" ?”
What will be the result
It's obvious.
In the past, the total transaction value of Disney's acquisition of Metropolitan ABC Group was only US$19 billion, including about US$3 billion in debt, so the valuation of the television network itself was only US$16 billion. Now, even based on Daenerys Entertainment's quotation, the valuation has reached 20.9 billion U.S. dollars. Taking into account debt, the total transaction value has risen to 24 billion U.S. dollars.
The difference between them is a full US$5 billion.
The development of Metropolis ABC Group is not much different from that of the same period in the original time and space. In other words, because Simon previously handed over popular series such as "Friends" and "ER Story" to the other two arrangements, it is still worse. Some. Just talking about TV network ratings data and not taking FOX into account, ABC is even at the bottom among the three major established TV networks. .
If the deal falls through, Metropolitan ABC's share price will surely plummet.
Because the field of television networks is also an industry that waxes and wanes. The four major television networks currently compete for the audience in North America, and they also have to face the impact of emerging cable TV and the Internet.
By then, let alone the US$16 billion market capitalization before the acquisition was launched, it is not impossible for Metropolis ABC Group to fall back to the tens of billions market capitalization threshold, because Daenerys Entertainment has proven some kind of ebb and flow in Hollywood over the past few years. The series of hit TV shows produced by Daenerys Entertainment are enough to prove that this company has the ability to change the landscape of television.
Simon put forward the hypothesis, and Buffett had already thought of these results in a flash. It's just that in the current negotiation situation, this veteran investor who has been in the capital market for many years will certainly not say it outright.
After thinking for a moment, Buffett looked up at the young man opposite and said, "Simon, how about we each take a step back and make a compromise of $176?"
Simon shook his head without hesitation and said: "Warren, I will not increase my offer by one penny, it is only 172 US dollars. I think you also know that today is our final negotiation, and there must be a result. Speaking of which, I also received a call from Welch in Europe a few days ago. He was happy to talk to me about NBC again. However, you also saw it at the beginning, so I will not hide it. I am still more interested in ABC. I just won’t pay more than I’m comfortable with.”
Buffett retorted: "Simon, I don't think the price of $176 is unaffordable for Daenerys."
Simon said: "I know you have always thought that the stock price of Daenerys Entertainment is on the high side, Warren. If I want to pursue profits, it is not difficult for Daenerys Entertainment to reach a net profit of US$4 billion in this fiscal year. Based on yesterday's Calculated at a closing market capitalization of US$156.2 billion, it actually only has a price-to-earnings ratio of 39 times. What is Metropolis ABC’s current price-to-earnings ratio? 41 times. If we exchange shares, we will actually suffer a loss."
"Simon, you are comparing assumptions to reality."
Simon shrugged: "Not counting assumptions, Daenerys's net profit in the first two quarters of fiscal year 1995 was US$1.73 billion, and the current public price-to-earnings ratio is only 45 times. Moreover, Daenerys is still maintaining high growth. Metropolitan ABC has no growth potential."
Buffett was speechless.
After all, business negotiations are also based on strength.
Buffett has been able to give others an ultimatum before. This time, both Metropolis ABC Group and Berkshire Hathaway are in a weak position.
Now it's even hard to get off.
Giving up this business would be a Waterloo-like disaster for both Metropolitan ABC Group and Berkshire Hathaway, and the consequences would be unbearable.
Buffett, who never liked haggling with others, was silent for a moment and said again: "$175, Simon, I can't give in anymore."
"Only $172," Simon continued to rub the coffee cup in his hand and said, "But Warren, I can add another bargaining chip, or a kind of support. Regarding Berkshire, you know, I In recent years, I have actually quietly purchased 4.9% of Berkshire’s shares, and I can meet the 5% filing standard at any time.”
Buffett was suddenly a little surprised. He looked at Simon carefully and made sure that the young man opposite him did not seem to be deceiving him. Then he said: "I remember that your wife is very unfavorable to my company."
He said with a little smile.
This is a feud.
Not only did Janet silence Buffett at a speech he gave in college in her early years, but she also teased the old man's investment model in front of Buffett at a party at the Hearst family a few years ago, saying that "Grandet saves gold coins." , Buffett was born in 1930. He is now 65 years old. He has been accumulating tirelessly for almost his whole life since he was delivering newspapers in elementary school. Every penny he spent was eager to be invested. Only then did he have his current family fortune. It is said that Grandet saved gold coins. , very vivid.
Simon also curved his lips and said with a smile: "Jenny is just a bit harsh on your words. In fact, both of us really appreciate your investment talent, Warren, so we have been buying quietly in recent years. As long as we complete this transaction, I can increase my holdings in Berkshire Hathaway to more than 5% when the time is right. I think this will greatly increase the confidence of Berkshire Hathaway shareholders in this company, and it will not It’s forcing you to invest in technology stocks.”
Even though he had just understood Simon's intention, Buffett quickly said: "But this is unfair to the shareholders of Metropolis ABC Group. Simon, I can't do this."
Simon ignored the old man's reserve and said: "Or, this time point will be set at the beginning of next year. By then, the Metropolis ABC acquisition case has been settled, and no one will connect the two things. Moreover, Warren, This is just my support for Berkshire Hathaway, not an exchange. As I said, it's only $172. Of course, if this trade fails, I may sell my shares because Berkshire Hathaway Thavey owns too many shares of MetroABC and I don't want to take a loss if MetroABC's share price plummets."
This is simply...
Buffett was speechless when facing the somewhat sinister young man in front of him.
At $172, there’s obviously really no wiggle room.
After thinking for a moment, Buffett said: "It's best to do it in April next year."
Simon understood: "No problem."
Berkshire Hathaway's annual meeting has always been held in May. If Westeros suddenly becomes Berkshire Hathaway's major shareholder holding more than 5% of the shares in April next year, and there is a lot of publicity and hype, what will happen again? Coupled with a wave of stock price growth, Buffett will definitely face much less pressure at next year's annual meeting.
Seeing Simon's agreement, Buffett stood up and extended his hand to Simon: "Then, let's make a deal."
Simon also put down the coffee cup in his hand, stood up, shook Buffett's hand symbolically, and said with a smile: "Deal."
There are a bunch of hot goblins waiting in the pool outside.
Now that the matter was settled, Simon wanted to serve tea to see the guests off, but unfortunately Buffett sat down again with a look of disdain: "Simon, on the way here, I read yesterday's prospectus of Igret, and some of the details in it made me very confused. .”
Simon had no choice but to sit down again and asked: "Warren, have you changed your mind and plan to subscribe for Eagleite shares?"
Buffett shook his head: "I still don't plan to buy it, I just want to know more."
All right.
Simon could only be patient and continued chatting with Buffett for another half an hour before finally seeing him off.
Then he called Robert Egger in Manhattan and told him that the matter had been negotiated and that the two parties could go further. Then Simon walked through the glass door of the living room and walked to the outdoor swimming pool.
At around four o'clock in the afternoon, the sun was no longer blazing, but the pool party was still in full swing.
During this time, the new Victoria's Secret show began to look for candidates, and Simon has always held the final decision on the Angel Legion's roster in his own hands.
For the highly competitive supermodel community in the fashion industry, this power is a matter of life and death.
Last Friday I set off to Italy to see Sofia, and then went around Ukraine, Russia, and Finland. I just returned yesterday. During this period, I noticed the documents from Victoria’s Secret. I decided to relax a little, so I This party.
There are currently more than 60 models in the manor swimming pool, all carefully selected from the lists provided by major agencies, and they are all newcomers who have never appeared on the Victoria's Secret T stage.
After all, men like novelty.
Simon is no exception.
After lunch today, it took two Navy One custom-made Black Hawk helicopters from the West Coast to make two round trips to transport a large group of goblins over. The meeting with Buffett ended until late at night, and the seaside manor in East Hampton was in the middle of a carnival.