New York 2006

Chapter 260 Money is not important, but controlling resources is important
Manhattan, New York City, ten o'clock in the morning.

An appointment had been made yesterday. As soon as Xu Youyu entered the headquarters of Goldman Sachs, a 30-year-old white man sitting on the bench in the front office immediately stood up and greeted him.

He stretched out his hand and said: "Hello Dr. Xu, I will receive you today. I am John Waldron, a partner at Goldman Sachs. You can call me John."

"Hi, John."

John bent down and said: "Please come this way, let's go to the reception room to talk."

"Okay." Xu Youyu nodded calmly.

As the CEO of Logic Investment Company, Xu Youyu’s performance in the past two years can be described as terrifying.Now he is a guest wherever he goes on Wall Street.It was no surprise that a Goldman Sachs partner welcomed him.

The two came to the elevator and waited. There were several Goldman Sachs employees in front of them.When they saw John bringing someone over, they all silently moved aside to let the two of them go first.

The journey was smooth and we arrived at the reception room of Goldman Sachs. The female assistant standing inside smiled and said, "I don't know, Dr. Xu, do you want coffee or tea?"

"Green tea, no sugar added."

John added: "I drink coffee."

"Okay." The female assistant said goodbye and left.

John said with amazement: "Dr. Xu, your record last year was really amazing, wasn't it?"

Xu Youyu shook his head: "You are not as good as Goldman Sachs. You are the only company that made a profit during the financial crisis last year among all the investment banks in the country. I still know the difference between a few hundred million dollars and tens of billions of dollars." .”

John smiled: "Is this why you and Logic chose Goldman Sachs?"

"Hahaha, yes." Xu Youyu nodded: "Since you have to choose, then choose the strongest one. These are Logic's original words."

Goldman Sachs is a very special company. Many investment banks have now become joint-stock companies, but they still retain the partnership system.This system has allowed them to become the largest investment bank in the world and also allowed them to act very radically.

Goldman Sachs’ partnership system is similar to that of a law firm.Every year, we select a few people from our outstanding employees to become partners.Goldman Sachs currently has only 2 partners among its more than 200 employees worldwide.

These partners have an annual salary of more than one million yuan, generous benefits, and hold shares in the company.

High income also comes with strong responsibilities. Goldman Sachs partners must bear all joint and several liabilities caused by business mistakes or company performance decline or false performance.

This corporate atmosphere of putting profits first and strong responsibility makes people at Goldman Sachs pay more attention to product quality control and risk management. On the other hand, they are willing to do whatever it takes to earn income.

Last year, Paulson, the big short seller, packaged subprime loans to obtain high ratings, sold them to investors, and then used CDS to short them.That’s what Goldman Sachs does as a middleman.This case is now being investigated by prosecutors in New York, and some media say that Goldman Sachs is [-]% illegal.I'll probably be fined in the end.

John said, "Yesterday you said you were involved in acquisitions. I wonder how Goldman Sachs can help you?"

Xu Youyu said: "Logic wants to acquire it and hopes to get help from Goldman Sachs!"

"I don't know which company it is?" John then added: "You can absolutely trust the credibility of Goldman Sachs. We will never reveal our clients' secrets."

Xu Youyu Youyou said: "Marvel!"

…………

Fiona stood aside and suggested: "Feili, would you like me to ask them to postpone the video conference."

"No need." Luo Ji then hooked his hand towards the director who was filming the music video not far away and motioned for him to come over.

"Logic, what's going on?" The director of the MV came over and asked doubtfully.

"Notify the crew and let them rest for an hour. I have other things to deal with here."

The director of the MV immediately said: "Then today's shooting may be postponed."

Luo Ji felt a little heartbroken, but still said: "If you postpone it, postpone it. Things on my side are more important."

"Ok."

Luo Ji walked towards the business car. The director of the MV walked towards the crew and announced to everyone: "Logic has something to do temporarily. Let's take a rest for an hour before shooting."

Everyone said nothing and nodded in agreement.But after everyone was busy with their own business, several extras from the crew got together and complained.

"It's so annoying. The shooting may have to be postponed. Is there anything Logic can't solve after the shooting is over? I have other shooting tasks tomorrow."

"Then why don't you go to Logic to protest? I saw him going to where he parked his car just now."

"I don't dare. Maybe he will let me leave directly. He is quite arrogant."

As the heroine of the "Let Her Go" MV, Alexandra Daddario is very popular among the crew.And as a beautiful woman, she will be treated favorably wherever she goes.

She came to a photographer who had a crush on her, smiled and said, "Do you know what Logic went to do?"

"Who knows? Every time he postpones shooting, he never explains to us why he is busy." The photographer said with some resentment: "I feel that he is very arrogant. We have already shot several MVs with him. In the past few days, some crew members wanted to invite him to dinner, but he refused."

Daddario defended Luo Ji: "Maybe he is very busy? He has many companies."

There was some hatred in the photographer's eyes: "Anyway, I feel that he is very arrogant and unwilling to get close to us, the lower-level crew members."

…………

Luo Ji came to the business car, took out his laptop and logged into the Skype video conference room.He opened it and saw that Xu Youyu, Zhu Haowei and several employees from Goldman Sachs were already waiting inside.

"Let the meeting begin now!" Luo Ji announced without hesitation.

John Waldron, a partner at Goldman Sachs, smiled and said, "Logic, I'll tell you the rest."

"Okay." Luo Ji nodded expressionlessly, but in his heart, he still had some admiration for him.

Goldman Sachs is indeed the largest investment bank in the United States, and the resources at its disposal are something Luo Ji cannot compare to.Just one day later, they had obtained a lot of internal Marvel information that Luo Ji had not had access to before.

They also acted quickly, setting up an analysis team overnight.The next day, before Luo Ji finished his work, he received their video conference invitation.

Who says Americans are inefficient? As long as the money is in place and the possible huge profits in the future, efficiency is not low at all.

John Waldron said: "Marvel is a comprehensive listed company. Its current business not only includes comic publishing, film and television production, but also includes toys, entertainment stickers, card collection and other businesses. Recently, with Following the craze of the Internet, in order to capitalize on the popularity, they also involved blogging, online broadcasting and other businesses."

"Yeah." Luo Ji nodded to show that he was listening.

John continued: "Marvel's peak market value was US$1993 billion in 28.6. By 1996, the market value reached its lowest point, which was US$1.9 million. At that time, the company was still burdened with debt of US$6.1 million. It became insolvent and almost went bankrupt and delisted.”

Luo Ji spoke anxiously, "I'm pressed for time right now and don't want to hear about Marvel's history. I want to hear directly about the acquisition plan you proposed."

"However, this history has a great causal relationship with the acquisition plan we will provide you next. Are you sure you don't want to listen?"

Luo Ji calmed down and said, "Okay, just say it."

"I'll try to keep the story short." John continued: "Marvel was not a normally operating company at all before it welcomed its current leader. Ronald Perelman, the former leader of Marvel, turned Marvel into This listed company became a capital arena, and Perelman took the company's profits into his pocket by issuing debt and misappropriating the company's public funds."

Luo Ji didn't hesitate and said sarcastically: "Take? I think stealing is a more appropriate word."

"Hahaha." Several people in the video conference laughed out loud.Luo Ji continued: "I know this. He lost a lawsuit against Marvel in 2005, but he misappropriated at least 5 million US dollars of funds, and in the end he only lost 8000 million US dollars."

"There's nothing we can do about it. This lawsuit has dragged on for almost eight years, and Marvel can't handle it anymore. The only solution is to settle and get cash. They have to pay off their debts."

In order to show his great power, John went on to tell some inside information: "Perelman is a celebrity on the Forbes rich list. He has been a corporate predator for so many years and has done nothing wrong. Not only because he has a strong The legal team is still because he has been firmly supporting the Democratic Party and has great influence in the political circles. The judge handling the case happens to be someone controlled by the Democratic Party."

"Okay." Luo Ji nodded without surprise. After all, this is a capitalist society. If you have money, you can do whatever you want. He can now accept this calmly.

John continued: "When Marvel almost went bankrupt in 1997, it launched a company battle. The initiator was the famous Wall Street Wolf King Carl Icahn. His goal was not to run the company well, but to buy shares in the company. , or auction company assets, or manipulate stock prices to make profits."

"Ah."

"While these two tycoons were fighting for control of the company, the small shareholders and the company's management couldn't stand it anymore. They joined forces and drove these two people out of the company. Now the actual controller of Marvel is the director President Isaac Perlmutter and CEO Avi Arad. They were the ones who drove these two asset grabbers out of the company. Now these two people in power at Marvel are obviously running the company with their heart. In the past few years, it has not only reduced the original debt of 6.1 million US dollars to about 4 million US dollars, but also allowed the company to successfully carry out its self-produced film strategy."

Luo Ji nodded to show that he was listening.

John paused and said in a concluding tone: "It is precisely because the actual people in charge of Marvel have experienced a very chaotic period in Marvel, so they are very wary of control of the company. Chairman Isaac Pearl Mutter holds 33% of the company's shares and is the absolute majority shareholder. The other shares are either in the hands of small shareholders or circulating in the market. CEO Avi Arad has formulated an extremely strict poison pill plan. Without the approval of the board of directors, if the company acquires 15% of the company's shares, the company has the right to initiate a poison pill plan."

Luo Ji said unhappily: "U.S. law will support such an outrageous poison pill plan. It's a poison pill plan again, how come even a company has it!"

"Why did you say again? Have you ever planned to acquire a company before?" John analyzed quickly: "Tesla, no, you only held 5% of the shares at the beginning. Could it be Netflix? I remember that in I saw in the news that your shareholding ratio reached 10%. Did you really plan to control or acquire Netflix?"

Luo Ji immediately denied it: "I didn't. This is not true. Don't talk nonsense."

A faint smile appeared on John's lips, but he did not ask any more questions and started to explain: "The poison pill plan seems very outrageous, but its emergence is also due to historical inevitable factors. It was corporate predators such as Carl Icahn and Perelman back then. It was too much. At that time, such people were not just one or two, but groups of people. Their purpose was not to run the business well at all, but to plunder assets. In order to combat this phenomenon, the government agreed to the poison pill Plan. If you look around among listed companies now, more than half have poison pill plans.”

"Okay. So what plans have you prepared?"

John said: "We have prepared three sets of plans for you. Plan A is to give Marvel's board of directors a satisfactory price and get them to agree to the acquisition. This is also the plan with the highest success rate. Plan B is to try to convince them if the acquisition fails. The board of directors may file a lawsuit to break through the poison pill plan and start a battle for the company. Plan C is to buy 14.9% and just wait for the company to develop."

"Plan C can be eliminated directly." Luo Ji said directly: "I don't lack investment channels, and Marvel's future development may not be as fast as the development of the companies I am optimistic about. What I want is to control resources, not simply have money. I I believe you can understand the difference between the two.”

John nodded seriously: "Of course we understand."

"Then let's talk about plan A!"

"In order to reduce acquisition costs, we suggest using funds to secretly acquire 14.9% of the shares in the market, and then have a showdown with Marvel's board of directors."

Xu Youyu, who had been listening in, was finally able to interject: "We have acquired 4.9% of the shares. Once the acquisition plan is thoroughly discussed and we have raised funds, we will acquire 14.9% as soon as possible within three days."

"Yeah." John continued: "The next step is a tough battle. Isaac Perlmutter has absolute control over Marvel, so it is up to him to decide whether to sell the company or not. He is 67 years old this year. , after our investigation, we found that he is a person who does not have a strong desire for power. But Marvel is also an achievement of his hard work, and he cannot give up easily. Unless you give him a price that makes his heart beat."

Xu Youyu said: "What is your estimate of his psychological price?"

"The current market value of Marvel is 16 billion US dollars. When "Iron Man" was released last year, the market value of Marvel was 22 billion US dollars. This range is almost the real price of Marvel. But it is obviously not feasible to acquire in this range. Possibly, their movie strategy is showing hope."

"Yeah." Luo Ji understood very well that it was impossible to pick up a promising listed company and acquisition at a premium was the norm.

John then solemnly said: "Marvel's peak market value is 28.6 billion US dollars. We think Perlmutter's psychological price is at least between 28 billion and 33 billion."

"You go on," Luo Ji said.

John continued: "Logic, I heard from Mr. Xu that you want to conduct a leveraged buyout and let Goldman Sachs provide financing?"

"Yes." Luo Ji nodded.

Leveraged buyout, to put it bluntly, is a way to use the company to be acquired to carry out asset mortgage loans and advance future rights to acquire the company.

This is very common in the financial market. Many of Shetonxiang’s acquisition cases used leveraged buyouts.

Take Luo Ji's acquisition of Marvel as an example. If he has 20 billion US dollars in cash, but the acquisition requires 30 billion US dollars, then Luo Ji can carry out a leveraged buyout.Use the future acquisition of Marvel as a mortgage loan. If the acquisition is successful, Goldman Sachs will invest billions of dollars to make up the difference.

Of course, things are far from being as simple as that. An acquisition case will involve negotiations on the valuation of the company, interest, acquisition commissions, compensation for failed acquisitions, etc., which will be very complicated.

For example, Goldman Sachs’ commission for this acquisition will be linked to the acquisition price. The lower the acquisition price, the more commission they will receive.

John continued: "Our Goldman Sachs valuation for Marvel is $16 billion, which is the current market value. Subtracting the current debt of $4 million and putting aside possible future risks, the most we can do for you is Providing leveraged loans of USD 10 billion."

Luo Ji said unhappily: "Marvel is at the bottom of the financial crisis now. This is obviously an underestimation. Your valuation is too low."

"This is the result of accurate analysis by our analysts. I can guarantee..."

"Stop, stop, stop." Luo Ji interrupted directly: "I don't want to discuss these issues with you. You can talk to the negotiation team formed by Mr. Xu. If the negotiation fails, I will find another investment bank."

John wisely did not retort, and continued: "Logic, if the negotiations go well, I hope that we at Goldman Sachs can lead the negotiations after the acquisition begins."

"Why?" As a star, he is naturally sensitive to traffic, and Luo Ji didn't want to miss this opportunity to be in the limelight.

"It's because of your performance when bidding for the Twilight Saga project with Summit Entertainment."

Luo Ji said, "What's wrong with this? Now that Twilight is so successful, everyone in Hollywood is praising me."

"Of course it's very good." John changed the subject: "But you also left a psychological profile of being impulsive and irritable, and refusing to give up until you achieve your goals. If during the acquisition of Marvel, let them think You could dominate the negotiations, which would be very detrimental to us."

Luo Ji was silent for a long time: "Okay!"

John then suggested: "Moreover, we should set a maximum purchase price as a rational bottom line to prevent the purchase price from being too high and making wrong decisions."

"it is good!"

…………

Two hours later, the video conference ended with smiles on everyone's faces.

The negotiations were very harmonious, and even the valuation of the leveraged buyout was settled after John proposed it again.This is the closing price on the day after the media reported that Luo Ji bought 14.9% of Marvel's shares and the market responded.

Of course, in order to prevent Goldman Sachs from manipulating the stock price, there is still a minimum leverage valuation.

During the video conference, Zhu Haowei also told jokes, and the atmosphere was very relaxed.

Luo Ji looked at his watch: "It's getting late, so I'll leave first. You can continue chatting."

John suddenly said: "Logic, wait. I have something to ask you. You can choose not to answer."

"go ahead."

"Did you plan to acquire Marvel at the beginning of last year?"

Luo Ji asked doubtfully, "Why do you have such an idea?"

John looked as if he had discovered his little secret. He said slightly proudly: "Otherwise, why did you choose to use "Twilight" to snipe Marvel's "Hulk"?"

Luo Ji: "..."

(End of this chapter)