"Since you have made up your mind, of course I have to think about it in the long run."
Chris smiled and said: "As for the acquisition, the information you have collected is already very comprehensive. Although Nokia's recent 1011 mobile phone has sold well, Nokia's own dilemma has not been resolved. In addition, our Funding advantage, the acquisition of Nokia is not a big problem, what we need to discuss is the acquisition method, Eric, if the acquisition is wholly owned, the premium will be very high, and your original plan to acquire the TV network will also be hindered Among the four major TV networks in North America, Fox TV Network is developing the fastest, and it will definitely not be sold. The market value of any of the other three TV networks exceeds 10 billion US dollars. If you use a stock swap merger, you may even lose The absolute controlling stake of Firefly."
In fact, Eric has been thinking about these issues. Things like the Gulf War that make a fortune will definitely not happen again. It will take a few more years to collect money when it stocks explode, and the acquisition The TV network thing is the sooner the better.
Eric vaguely remembered some data. In the original time and space, the order of integration of the three major North American TV networks and film companies was abc, cbs and nbc. In 1996, Disney completed the acquisition of abc for about 19 billion US dollars, but only three years later , ￥, in 1999 Viacom bought cbs but spent 37 billion US dollars, the size difference between the two TV networks is not too big, this situation is mainly due to the rapid economic growth of the United States in the 1990s caused by the stock price rising.
"Chris, do you think it is feasible to acquire the TV network by issuing corporate bonds based on the current performance of Firefly?"
Chris thought for a moment. Eric doesn't hide many of his plans. If you go exactly according to the plan that Eric communicated with him. Firefly could probably raise $5 billion in cash during the negotiation process to buy the TV network, but if it wants to annex any of the three major TV networks, the size of the fund is probably around $15 billion just to be safe.
15 billion minus $5 billion…
Thinking of this, Chris suddenly widened his eyes, looked at Eric in disbelief and said: "Issuing 10 billion US dollars in corporate bonds, Eric. You are really crazy."
Not to mention $10 billion in debt financing, as of 1993, even in the world, there were very few companies involving more than $10 billion in corporate mergers and acquisitions, not to mention the issuance of tens of billions of dollars in order to acquire a company. The company's debt can only be described as crazy.
Eric didn't care about Chris' frightened appearance, and said: "Chris, think about it from another angle, we all know the current situation of MGM. MGM's current assets are between 1 billion and 1.5 billion US dollars However, the debt of this company is as high as 1.7 billion US dollars. The debt ratio exceeds 100%, but if the acquisition of the TV network is completed, there is absolutely no problem for Firefly’s assets to reach 30 billion US dollars. Only less than 40%."
"However, Eric, the billion-level debt and the tens-billion level debt are no longer a simple matter of numbers."
Of course Eric knows this. Investors generally buy corporate bonds because the risk of bonds is relatively low, and they don’t have to bear the risks brought about by the fluctuations in corporate performance like stocks. Therefore, the larger the amount involved, the more prudent the investor will be, discovering tens of billions of dollars in corporate debt at one time, even a giant like General Motors has never done so.
However, Eric is full of confidence. In his memory, in the process of Disney's acquisition of ABC TV in the original time and space, he successfully completed the tens of billions of dollars in debt financing. What's more, the current business situation of Firefly Pictures is better than that of Parallel Time and Space. Disney is too strong: "Chris, perhaps for other companies, the one-time issuance of tens of billions of dollars in corporate bonds is indeed too large to discourage Wall Street investors, but Firefly is different. The net profit of the industry is close to one billion U.S. dollars. This year, the box office share of the three films "Jurassic Park", "A Bug's Life" and "Clash of Heaven" alone will reach 500 million U.S. dollars. , this is only a part of the omni-channel operation of the film. This kind of profitability is enough to dispel the concerns in the hearts of most investors."
Chris was about to speak when the car stopped suddenly. Eric looked out the window only to find that the car had parked in the hotel's underground parking lot.
Chris put all the materials back into the suitcase and said: "Eric, I will pay attention to this matter. I will find time to do a feasibility assessment when I return to New York. Jorma Ollila may return to Finland in the afternoon. , so we only have one lunch exchange time with him, let’s focus on Nokia first.”
Eric nodded, got out of the car, and arranged for Chris and his party. It was almost noon, and Eric and Chris hosted a banquet in a nearby restaurant on behalf of Firefly.
According to the discussion between Eric and Chris, Firefly Investment will issue a takeover offer to Nokia within three days. Before the completion of the takeover, their positions with Jorma Ollila will be temporarily opposed, so the two sides at this luncheon The conversation did not involve too many substantive issues. Eric just talked nonsense to Jorma Ollila about why he became interested in Nokia, and Jorma Ollila talked a lot. Fan digital mobile phone and the prospect of the global mobile communication network (gsm), finally the host and guest enjoyed themselves.
Jorma Ollila returned to Finland in the afternoon to conduct preliminary communication with the current shareholders of several major banks of the Nokia Group.
Eric and Chris rented the hotel's meeting room and began to discuss specific acquisition plans.
Although the Nokia Group has divested or sold loss-making paper, rubber and television businesses in recent years, as a once diversified Finnish giant company, in addition to the mobile communication equipment sector, the Nokia Group currently also owns energy, pharmaceuticals and cables. And other businesses, this part of the assets has not been divested and sold because it has been profitable. And accounted for about one-third of the group's total assets.
Although mobile communication companies in some European countries have begun to operate gsm networks. And thus increased the sales of Nokia's first gsm mobile phone 1011. However, the gsm network has not been fully popularized after all. In addition to the huge R & D investment in the early stage, although gsm mobile phones have a bright future, Nokia's mobile phone department is still in a state of loss, and the funds have been fed back by other profitable departments, except Eric For this traveler, no one can predict the explosive growth potential of gsm mobile phones in the next few years without seeing actual profits. Shareholders of the Nokia Group will not tolerate this situation continuing, which is why Jorma Ollila desperately needs outside investment.
Everyone knows that energy and pharmaceuticals are industries full of huge profits, but Eric is not interested at all. After all, in terms of scale, these businesses of Nokia are not even small shrimps in front of those giants.
After a detailed discussion, Eric finally decided that the top priority is to acquire Nokia's mobile communications department, which not only includes the mobile phone business, but also the communication equipment business. It mainly produces base station equipment of gsm network, as the first country to use gsm network. Nokia's technology in this area is much ahead of other communication equipment manufacturers.
In the afternoon of the next day, Eric and Chris walked out of the conference room together. Chris still held a stack of documents in his hand and said: "In order to develop gsm mobile phones, the Nokia Group has been losing money for the past two years, which means that Nokia will use those profits All the profits generated by the department have been invested in the research and development of gsm mobile phones, and now that the results have been released, I think that as long as Nokia shareholders have a little foresight, they will not package and sell the mobile communication department to us."
"Who knows, maybe Nokia's shareholders will be eager to cash out," Eric said: "But in any case, we must at least get an absolute controlling stake in Nokia."
This is the bottom line of the acquisition discussed by the team in the past two days. Chris also nodded in agreement and said: "Then, I will issue a formal acquisition offer to Nokia tomorrow morning. Also, regarding the name of the offshore investment fund that was just discussed, you Come up with a name."
Because the tax rates of each country are different, in the process of cross-border acquisitions, the circulation of large sums of money will always involve tax issues. The usual solution is to inject funds into an offshore company, and then conduct investment operations through the offshore company. At the same time, Such offshore investments can also serve as a hidden asset. Although it is only 1993, due to the convenience of offshore investment, the scale of funds in various offshore capital centers around the world has exceeded one trillion US dollars.
Eric remembered the babbling voices of the two little guys when he was on the phone to New York yesterday, and quickly said, "Let's call it the Hawaii Fund."
Chris nodded and said with a smile, "Do you prefer daughters?"
"Yeah, haven't you heard the saying that the son is the enemy of the father in the previous life, and the daughter is the lover of the father in the previous life?"
"There seems to be such a saying, and I think it's quite scientific. For a long time, my relationship with my father was not very good, but Emily and her father have always been very harmonious. Maybe you don't know, I There have been several disputes with Emily's father, and almost every time she is on her father's side." Chris said with a smile on the corner of his mouth, and then said: "Then I will let people register this name."
Eric hummed, the meeting room was on the bottom floor of the hotel, the two came to the end of the corridor, the rest of the team went directly to the restaurant for dinner, but Eric had to go upstairs to change clothes, and Chris also had some things to do After a trip to the room, while waiting for the elevator, Chris asked curiously, "Which company is your date tonight?"
In addition to Nokia, in order to cooperate with the negotiation of the General Agreement on Tariffs and Trade, Eric also has to take into account the cooperation with European film forces.
"MGM's largest shareholder, LYON CREDIT, the two movies released by MGM during the summer period suffered huge losses. CLSA failed to sell MGM last year, and now they want to sell MGM even more. This is a hot commodity, but before they sell it, they hope that MGM's performance will recover so that it will be easier to find a next home."
The elevator door opened, and Chris and Eric turned sideways together to let the guests in the elevator leave before they walked in. Chris pressed the button, and then asked the topic just now: "Didn't you ever think about buying MGM?" ?"
"Of course I want to. I'm very envious of MGM's huge film library. If I can win MGM's film library, not only can I make full use of Firefly's current omni-channel operation resource advantages, but also for the future TV network. The development of MGM also has great benefits, after all, TV networks still need a lot of high-quality content. But apart from the film library, MGM has nothing to tempt me."
In the transfer in 1986, Ted Turner only left MGM's film library before 1948, which is why Time Warner's Turner Broadcasting Company has started to broadcast old MGM films in recent years. , but MGM still owns the copyrights of more than 4,000 movies and a larger number of TV series, and its film library is second only to Time Warner. However, due to MGM's continuous losses for many years, this once glorious film giant was unable to take advantage of its huge film library and could only continue to struggle in the vicious circle of continuous borrowing and continuous losses.
Chris said, "Isn't there still the 007 copyright?"
"Based on MGM's current debt scale, according to the annual interest rate of 5%, the debt interest to be paid every year is as high as 80 million. MGM launches a 007 in an average of two years, and the profits generated are not even enough to pay the interest on corporate bonds. , That’s why MGM has been losing money all these years, and the debt is getting more and more.” Eric was talking about MGM casually, and suddenly had an idea, and couldn’t help kicking the elevator wall with his toe. Some excitedly said: "I suddenly thought of a good idea."
Chris looked over suspiciously: "Huh?"
"Compared to the giant Crédit Lyonnais, these European film companies are all small fish and small shrimps. If they are matched by Credit Lyonnais and then operated with the 'shell' of MGM, Firefly will be able to Get out of this matter, and don't need to interrupt the established operation track."
Chris already understood what Firefly was going to do in order to cooperate with the GATT negotiations. After listening to Eric's words, he immediately understood what he meant. Originally, many of Firefly's production plans for next year or even the year after It is determined that in order to cooperate with the GATT negotiations, Firefly needs to share some resources with European film forces, so the established development plan of Firefly must be adjusted accordingly, but if Firefly indirectly cooperates with European film forces through MGM If the company cooperates, the headquarters does not need to make too many adjustments.
However, Chris is not very optimistic about Eric's thoughts: "You just said that MGM's current annual profit may not even be enough for the interest of corporate bonds. I think those European film companies will not be aware of this. , do you think they will agree?"
"Then invite all parties to sit down and negotiate. In MGM's current situation, I think that as long as the company can be led out of the predicament, those creditors will agree to temporarily give up some interests. Otherwise, once the company goes bankrupt, MGM Its assets are not enough to pay off its current debts, and MGM’s biggest problem now is that it does not have enough funds to start more film projects. Creditors have needs, European film companies have funds, and Firefly can provide high-quality film projects. The combination of these conditions can almost revitalize this dead film company, do you think they will be tempted?"
Chris nodded, but said: "Didn't you just say that you are very excited about MGM's film library? If MGM really comes back to life as you said, in the future you want to buy this film company, the price you will spend It's even bigger." (To be continued...)