Chapter 326 Mortgage again
This time, Barron acquired the shares of the Gucci Group in the name of DS Holdings, which held 75% of the shares of Argos Retail Group and 78.5% of Woaw Technology. shares, 31% of Argent Real Estate Group shares, and 20 million Google shares, a total of 2.5 billion pounds of funds were borrowed from Northrock Bank as collateral.
Among them, Argos Retail Group is valued at 1 billion pounds, and 75% of Argos Retail Group shares are worth 750 million pounds; Woaw Technology is valued at 1 billion pounds, and 78.5% of Woaw Technology shares are valued is 785 million pounds; Argent Real Estate Group is valued at 1 billion pounds, and 31% of Argent Real Estate Group shares are valued at 310 million pounds; 20 million Google shares are worth approximately 1.15 billion pounds at this time...< br>
This asset with a total value of 3 billion pounds was used as collateral. Colin Hall of Northrock Bank took the initiative and issued a loan of 2.5 billion pounds for DS Holdings, and the interest was only 5%...
It can be said that the conditions of this loan are already the best at present.
It is worth mentioning that up to now, although Barron's industry has been expanding, the debt borne by his DS Capital has also been increasing like a snowball.
Only the relatively large amount of debt includes a loan of 4 billion pounds from Northrock Bank using O2 Telecom's shares as collateral - this does not include the two issuances of O2 Telecom. £2bn of corporate debt.
In addition, when acquiring the Manchester United Club, the 400 million pounds raised from Goldman Sachs Group was later used as collateral for 60% of Pioneer Sports Group's shares, and was exchanged from Goldman Sachs Group for an equal-amount loan with a lower interest rate...
There is also the US$3 billion in financing from Goldman Sachs Group when acquiring the shares of Standard Chartered Bank; and the loan of 1.55 billion pounds from Standard Chartered Bank for the shares of the listed company Summit Media held by DS Holdings. .
In other words, before this mortgage loan was made to Northron Rock Bank, all the shares in O2 Telecom, Pioneer Sports Group, Standard Chartered Bank and Summit Media held by DS Holdings were under mortgage. among.
In addition to the shares pledged to Northrock Bank this time, just on the surface, all the relatively high-value company shares held by Barron's DS Holdings have entered a mortgage state.
Frankly speaking, this situation is still very dangerous for an investment company.
Fortunately, among the mortgage companies controlled by DS, they are developing well and most of them have not been listed. Otherwise, if there is an economic crisis or the stock price is shorted, then as the "value" of the mortgage assets decreases, There will be demand pressure from banks.
A loan of 2.5 billion pounds is equivalent to approximately 4.5 billion U.S. dollars at an exchange rate of 1.8 pounds to the U.S. dollar.
After signing an agreement with Bernard Arnault’s LVMH Group to acquire its 20% stake in the Gucci Group for US$2 billion, Barron also sent someone to contact the management of the Gucci Group. .
The current Gucci Group owns Gucci, Yves Saint Laurent (YSL), Sergio Rossi and other brands. Starting from April this year, the CEO of the Gucci Group, who once led the Gucci Group to resist the LVMH Group Due to the decline in Gucci's performance in the past two years, De Sol, the acquirer, had conflicts with PPR Group, the largest shareholder of Gucci Group.
PPR Group once had the idea of replacing the CEO of Gucci Group. I am afraid that once they control more shares, De Sol's departure will be a certainty.
The relationship between creative director Frida Giannini (Frida Giannini), who has made great contributions to the Gucci Group, and De Sol is a lover. It can be said that it is a matter of advancement and retreat - in the original time and space At that time, the two left the Gucci Group together.
So at this time, DS Holdings under Barron’s name reached 35% of the Gucci Group by purchasing 20% of the shares of the LVMH Group and 15% of the shares from the secondary market. When PPR Group's 42% shareholding is not much different, it is very important to obtain the support of Gucci Group CEO De Sol.
In fact, in 1999, when the LVMH Group acquired 34% of the shares of the Gucci Group and became the major shareholder of Gucci, the CEO of the Gucci Group, De Sol, once said to Bernard Al Nuo made a request for LVMH to acquire the entire Gucci Group.
However, Arnault rejected the proposal at the time. The main reason was that after LVMH made several acquisitions at that time, the remaining funds in its hands were no longer enough to completely acquire the Gucci Group. In this case, Arnault would prefer to control Gucci. Group, achieves the goal of killing two birds with one stone - on the one hand, it controls the Gucci Group at a relatively small cost, thereby inhibiting the other party's strong competition in the field of luxury goods; on the other hand, it obtains considerable returns from this investment.
Arnault’s idea is definitely unacceptable to the Gucci Group. It is like the United States to Mexico. It does not want you to fully join the United States, but it also wants to take your most abundant resources. If the territory is ceded, it will be fine if there is no resistance. If it can resist, the Gucci Group will certainly not submit.
At that time, they hired PPR Group. Before that, PPR Group had not entered the field of luxury goods. Therefore, it would not be harmful to Gucci Group if PPR Group became a "white knight".
But the problem now is that after acquiring 42% of the shares of Gucci Group, PPR Group has also seen the "money path" in the luxury goods field. Although in the past five years, PPR Group has not been able to increase its investment in Gucci Group holdings, but they turned to Supported the Gucci Group to acquire a series of luxury brands including Bottega Veneta, Balenciaga, etc. - When it received the additional shares, the PPR Group invested a lot of money in the Gucci Group, which also became the basis for the Gucci Group to acquire these brands. ammunition.
As the five-year period is approaching, PPR Group is bound to significantly increase its shareholding in Gucci Group.
If no one else appears, even if there are differences with the PPR Group in terms of business philosophy, in the end the Gucci Group can only accept being completely acquired by the PPR Group. This is also a big deal for this group. Compared to being acquired by LVMH Group, this is already a better result.
But now, the emergence of DS Holdings has given De Sole another option - you know, Gucci management still holds about 10% of Gucci. As for the group's shares, the sum of their shares and DS Holdings' current 35% share already exceeds the PPR Group's shareholding.
If DS Holdings can step up its efforts and hold more than 40% of the Gucci Group's shares, then it will be in an invincible position by cooperating with the management of the Gucci Group...
< br>Therefore, in the fight for the Gucci Group, the most important thing, in addition to continuing to absorb the shares of the Gucci Group, is to persuade De Sol to cooperate with him and expel the PPR Group.
DS Capital currently has US$4.5 billion in funds, which can fully support them in achieving this goal.
What Barron did not expect was that when faced with the representative of DS Holdings, De Sol's request was to meet Barron directly.
So the Gulfstream G450 took off from France and flew to Italy.
After meeting Barron, De Sol asked directly:
"Your Highness the Duke, I just want to know whether you have the strength to completely acquire the Gucci Group."
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De Sol also asked Bernard Arnault about the same thing five years ago, but unlike Arnault, Barron gave an affirmative answer without hesitation.
“I can help you complete the acquisition of Gucci Group, but there are two conditions. The first is that you must acquire Gucci wholly; the second is that even if you acquire other luxury brands in the future, it must be based on Gucci Group serves as the core for acquisitions”
(End of this chapter)