Eric only stayed in Los Angeles for one night, and hurried back to New York the next day.
Although they fought for Firefly's debt underwriting business before, Morgan Stanley and Deutsche Bank still professionally conducted a rigorous review of Firefly's business and financial information after reaching a cooperation agreement After several discussions, the two parties finally reached an agreement on detailed cooperation terms and bond prices after half a month. Afterwards, Morgan Stanley and Deutsche Bank respectively submitted to the securities regulatory authorities of the United States and Germany. Registration instructions.
The securities markets in the West are very well-established, and the securities departments of the government often only play a regulatory role. They often only guarantee the accuracy of the information publicly disclosed by the bond issuer, and do not make any assessment of the investment prospects of the bond, even if the risk is very high or even high. Bonds with no investment value at all can easily pass the review as long as detailed and accurate report documents are submitted.
Therefore, it is usually the bond underwriter who plays a leading role in the bond issuance process.
The annual interest rate of the bonds finally established by Firefly and the two lead underwriters is 5.5%. Compared with Firefly’s asset credit rating, this annual interest rate is very high. , Firefly's long-term bond interest rate only needs to be around 4%. During the pre-market testing process of Morgan Stanley and Deutsche Bank, investment funds from various states in the United States and European investors have proposed to purchase Firefly bonds with a total of 3 billion U.S. dollars. After the review by the German securities trading department, it was basically confirmed that Firefly's securities issuance was a success.
After the subsequent review by the securities department. Firefly only needs to cooperate with Morgan Stanley and Deutsche Bank in bond sales. And pay the funds to the original abc shareholders.
Eric handed over the follow-up of the securities issuance to Firefly's chief financial officer, Caroline Elliott. Then began to participate in the specific merger process of Firefly and abc.
The pre-negotiations between the two companies have determined the specific merger plan in detail, and what Firefly has to do is to conduct a detailed review of ABC's balance sheet and property list again.
Firefly's acquisition of ABC for US$15 billion easily surpassed Viacom's acquisition of Paramount last year and became the largest acquisition in the North American media industry.
With such a huge amount of funds, the result of the acquisition is of course a very large asset portfolio.
In addition to abc's most valuable national public television network and more than 200 affiliated television stations, abc's assets also include ten self-operated television stations and 21 radio stations located in major cities in the United States. ABC TV production department, ESPN sports channel which holds 80% shares, and A&E TV network jointly held by Hearst Group. At the same time, there are also a number of newspaper and magazine assets under the former Metropolitan Media. Moreover, these assets include a large number of properties such as real estate and cars.
In addition, there are many other scattered assets. Eric even found a hand-drawn animation production company in France on the property list of ABC.
It took Firefly's acquisition team nearly a month to sort out the asset information after the abc board of directors approved the acquisition.
So it was not until the morning of April 10 that Eric signed the final transaction agreement with Tom Murphy of ABC. At this point, Firefly finally succeeded in acquiring the largest TV network in North America.
After signing the merger agreement, the total share capital of Firefly has been expanded several times. It has reached 135 million shares, of which the original shareholders of abc except a part of the tradable shareholders who are directly exchanged for cash or bonds. A total of 32.5 million Firefly shares will be obtained. Jeffrey and Michael Lynn originally obtained 1.5 million shares and 500,000 shares from Eric respectively. Firefly has spent a total of 1 million shares in equity incentive plans in recent years. The remaining shares are all held by Eric personally, with a total of 99.5 million shares, accounting for 73.7% of the total share capital.
After this merger, Firefly Pictures will also be named Firefly Group. The company has evolved from a film company to a comprehensive media group involving film, television, music, books, tourism and other fields.
With Firefly's greater information disclosure during the acquisition of abc, Firefly's financial and shareholding information has once again become the focus of public attention.
At this time, the price-earnings ratio of most companies with good operating conditions in the North American stock market remains between 10 and 30. The company's price-earnings ratio represents a company's profit and investment risk information, and is a very important financial data for listed companies. The price-to-earnings ratio is usually calculated by dividing a company's price per share by its net earnings per share.
Based on the 20 times price-earnings ratio of Time Warner, which is at the same level as Firefly, and the combined profits of Firefly and ABC in 1993, the stock price of Firefly's total of 135 million shares will reach about 252 US dollars, which means that Firefly The market value of Firefly is expected to be around 34 billion US dollars. Based on this calculation, Firefly has steadily surpassed Time Warner to become the largest media group in North America.
Before the acquisition of abc, although Firefly surpassed Time Warner in terms of profit, its status was still questioned by many people because of the uncertainty of film investment. leading position in .
Therefore, this has become the focus of a lot of media attention. At the press conference after the signing of the final agreement, the first question from the reporter of the American "Business Weekly" asked: "Mr. Williams, Firefly has now become the largest media group in North America and even the world, and you are so young. , I don’t think you will stop at this point, so what will Firefly do next?”
Of course, Eric has a further ambition in his heart, which is to control the entire Hollywood through various direct or indirect means, but of course he will not say it so easily. and. Although the acquisition of abc was successfully completed. But the scale is so huge. Firefly will definitely encounter various problems in the future. The first thing Eric has to do is to solve a series of problems that may arise in the future.
After thinking for a moment, Eric replied: "My current plan is to run the brand new Firefly Group well. Besides that, I have no other plans."
The reporter of "Business Weekly" continued to ask unwillingly: "Firefly and ABC are already the top companies in the federation. Don't you, Mr. Williams, have no ambition to continue to expand?"
Eric realized that the reporter might have some other intentions, but he replied with an unchanged smile on the surface: "I don't know if anyone else has found out. But when I researched a lot of materials, I found that many times, No matter how big or small, companies that encounter mergers will encounter a series of problems in the early stage of changing owners. Even if the company is in good condition before that, it is often difficult to avoid losses. It will be silent because of mergers, but some will become more prosperous. This process is very similar to a regime change in a country. Years, just go through this 'Nirvana' period smoothly."
Eric finished. There was a murmur of whispers in the audience, and the reporter from "Business Weekly" immediately said after a short thought: "Mr. Williams, your point of view is very novel, and I have never heard of it before. Can you cite a few examples at will to prove it?"
"It's very simple. Let's take abc as an example. In 1985, before abc was acquired by Metropolitan Media, its annual profit was 130 million U.S. dollars, but in the second year after the merger, Metropolis-Abc fell into a $70 million profit. Losses. Both Mr. Tom Murphy and Mr. Buffett are excellent management and investment talents, and the excellent profitability of abc in recent years is the best proof. So these should not be their problems, but what I just said Of course, my personal knowledge is very limited, and I can't guarantee that this view is really a common phenomenon. So if any professional economics expert is interested, you can study it," Eric said After that, he didn't continue to pester the reporter of "Business Weekly", he pointed to a reporter himself and said, "Okay, next one."
"Mr. Williams, according to recent media information, your personal assets are close to 20 billion U.S. dollars, but we found that you have never conducted any charitable activities, nor have you established any charitable funds. Don't you think this is A very socially irresponsible behavior?"
Eric froze for a moment, but the question was even more acute. He has good eyesight, and when he saw the words "Christian Science Monitor" written on the pass of the black female reporter in the audience, he understood why the other party asked such a question.
In addition to Eric, another Buffett who is obviously not very enthusiastic about charity is also sitting nearby. Eric does not know the details of the Buffett Foundation later, but he is very clear that the Buffett Foundation at this time is actually very Doing less money for charitable activities, most of the time is still investing in accordance with Buffett’s wishes, and most of the funds for the Buffett Foundation come from Berkshire Hathaway’s stock dividends. Buffett is a personal No dime has ever been issued.
After the female reporter asked the question, she glanced at the nearby Buffett meaningfully. It was obvious that she meant something. You know, at this time, Eric and Buffett were respectively ranked first and second on the "Forbes" North American Rich List bit.
Faced with such a sensitive issue, Eric had to think carefully for a while before saying: "I personally believe that the real sense of responsibility is to create more jobs for the society with the wealth in hand, so that ordinary people can support themselves , instead of blindly reaping something for nothing. Firefly has been doing its best to do so. For example, in recent years, Firefly has built Firefly Studios in Los Angeles and invested in the digital field studio in Florida, creating tens of thousands of brand-new for the Federation. Jobs. Of course, general charity has also played a very positive role in this society. There are many people in difficult situations who need help in this society. In the next few years, a corresponding charitable fund will be established to increase investment in charitable activities."
Eric's answer seemed a bit tactful, the black female reporter was obviously dissatisfied, but this time, the host realized his mistake just now, and quickly clicked on another reporter, and the next question was not too out of line , most of the reporters asked about the next phase of Firefly, such as reorganization, layoffs or business adjustments.
After the press conference was over, the group quickly moved to the routine celebration reception.
Eric held a glass of champagne in his hand and was just about to chat with Robert Iger, the former president of ABC, when Tom Murphy and Buffett walked over side by side, and the two old men showed a look of asking questions.
After the merger was completed, abc withdrew its seat on the board of directors. According to the agreement, Tom Murphy will continue to serve as the CEO of abc until the end of 1995. Tom Murphy and Buffett originally thought that this was Eric's compromise to them, but never After Eric's speech at the press conference, the two old men realized that they felt too good about themselves. This little guy was obviously trying to extract the last bit of value from them old men: "Hey, Eric , I finally understand, it turns out that you insisted on letting me, an old man who will soon be 70 years old, continue to serve as the CEO of abc, so that abc can survive this merger smoothly."
Eric looked at Tom Murphy, who was aggressive but still had a faint smile on his face, shrugged his shoulders slightly, and said with a smile: "But, Tom, I never denied that I didn't intend to. You are the same now The majority shareholder of Firefly shouldn’t object to making abc better, right?”
Hearing Eric's words, Tom Murphy suddenly felt that he seemed to be really angry and a little inexplicable, but of course he would not admit it, and blamed him with a smile: "No wonder Warren just said that you, the little guy, are too smooth .”
"Oh, I think it's a compliment to me," Eric said to Buffett with a smile.
Buffett shook his head with a smile, and said: "I agree with what you said in response to the black female reporter. Creating more jobs for the society is the real charity. The rest are just for those who want to get something for nothing. People really get something for nothing, and I have encountered many situations similar to squandering donors’ money before.” (To be continued.)