Chapter 1295: Spoiling the situation
The entire 1980s, in the history of world finance, was also known as the decade of greed.
Why?
In fact, the answer has nothing to do with Japan’s economic bubble.
Mainly because corporate mergers and acquisitions in European and American countries are increasingly becoming an excellent business.
And there are more and more ways to play.
As we all know, in modern times, under the background of the Industrial Revolution and the capitalist system of European and American countries, large-scale and unprecedented private enterprises have been born in European and American countries.
These private companies have not only subverted the old way of life one by one, but also occupy leading positions in all walks of life, almost constituting the most important part of the world economy.
This situation remained roughly the same until the 1980s.
However, in the 1980s, a large number of corporate founders in European and American countries were reaching old age and were facing the problem of corporate inheritance.
These elderly people had to allow various professional managers to take their place on the stage and start dancing with guns and sticks.
In the context of slowing economic growth, many companies have begun to merge and reduce competition in order to survive.
As a result, increasing revenue and profit scale through mergers and acquisitions has become the only choice and basic operation for professional managers in this era.
LVMH is a very typical example.
Henry Lacamier of LV hopes to expand the company's business categories in order to stabilize the company's operations and increase profits to a higher level.
What Alain Chevalier of MH fears most is that there are too many shareholders and the management has insufficient voting rights. He hopes to cling to a big tree to avoid being acquired by outsiders.
It was precisely because of different interests that the two of them were willing to complete the marriage of brand and enterprise.
In addition to this reason, in this era, there are many loopholes that can be exploited in corporate mergers and acquisitions, and gold can really be picked up.
Although there are laws and regulations governing it, the law still needs to be improved.
Commercial companies also suffer from untimely, opaque, slow dissemination and other shortcomings in information disclosure.
In addition, there are always a few geniuses in this world. Even if they are appointed by the founders, the management of most listed companies are very corrupt and incompetent.
What they are best at is often cultivating relationships rather than effectively managing the enterprise. The most common thing most CEOs do is destroy value rather than create value.
This has resulted in many companies being severely undervalued, and the quality of the company deviating significantly from the value of the shares they issued.
As a digression, it is actually because of the difficulty in finding a suitable successor.
Whether it is Henri Lacamière or Pierre Carton himself, even though he knows that his body and energy have declined severely, he still has to personally take charge of the company and sit in the top position and suffer. of support.
None of them can rest assured and leave their brands and companies to outsiders.
As a result, in such an ecological environment, this led to frequent mergers and acquisitions in European and American countries during this period, and a large number of financial giants emerged to feed on this.
From 1982 to 1988, the overall transaction amount in the United States alone rose from US$11 billion to US$181.9 billion. It can be said that every family has a drink, and everyone has a drink. People have meat to eat.
There is no doubt that the financial center of the world has been transferred from the United Kingdom to Wall Street in the United States.
Of course those currently engaged in this industry also use American companies and Americans as industry benchmarks.
In this era, the most famous related private equity fund in the United States is KKR.
This private company with a total of three founders and a history of less than ten years has achieved amazing success in terms of corporate mergers and acquisitions despite its short establishment.
Not only is it famous, but it has already consolidated its status as the leading acquisitions company on Wall Street, and its management scale also leaves its followers far behind.
They are even the root of the term "Barbarians at the Gate".
You know, a year later, in 1988, in the business war to acquire Reynolds-Nabisco, KKR relied on its wealth to head-on without reaching a consensus with the management. He fought hard against the management and completed the acquisition using arrogant and hard-line tactics.
As a result, it received this classic image from its competitors, and became the name of books and movies that recorded the acquisition in the future. It also became a keyword in the Chinese capital market from 2015 to 2017.
As for the companies in the world that can match their M&A capabilities and achievements, there is only one lone man - Carl Icahn, known as the "corporate predator" in the United States.
In 1985, Carl Icahn became famous in the hostile takeover of Trans World Airlines, and has since become the "Wolf of Wall Street" that has shocked the United States.
The annual compound rate of return of Icahn Capital under his name is even higher than that of Buffett, Madoff, and Ross, but the gameplay is completely different.
Carl Icahn can keenly observe the differences in interests between senior managers and shareholders of listed companies, and uses various financial means to make profits.
Of course, this is actually the secret to KKR's fortune.
The commonality of playing this kind of capital game is that in addition to having a unique vision and being able to keenly discover the weaknesses of good companies and companies, you also have to be good at using various financing methods to increase your leverage. Extreme.
Because of this, if you want to look at everything Bernard Arnault did for LVMH from a professional perspective.
In fact, it is difficult to give any good evaluation to this little French wolf that has just developed its bloodthirsty and is far from mature.
In fact, in addition to being very Jewish, Bernard Arnault has a greedy heart and a vicious and selfish temperament. Whether it is in terms of M&A experience or means, he is completely different from the real M&A. Compared with experts, there are obvious gaps and too many shortcomings.
You must know that in corporate M&A transactions, the most stable business processes and most successful models should usually follow the following steps.
First, choose a company worth starting with and find its weaknesses.
Second, negotiate with the management to reach an agreement on intentions - for example, although it is an overall acquisition, management equity and management incentives will be given).
Third, design a plan to complete fund raising - factors such as interest rates, cycles and equity ratios must be considered.
Fourth, acquire shares to complete privatization.
5. Improve short-term operating efficiency - after taking over a company, they often try to increase cash flow and profits in three to five years by reducing costs, splitting businesses, etc., to bring public confidence and stimulate stock price increases.
Sixth, sell shares - be merged or re-listed, sell them at a higher price and exit.
In short, the indispensable elements are timing, funds and allies, that is, the right time, location, and people in Chinese culture.
So in order to hit the target and reduce variables, even industry leaders KKR and Carl Icahn have to reach an agreement of interests with some people in the company and make appropriate concessions before acquiring the company.
Then raise funds to complete mergers and acquisitions, and finally push up the stock price or split and sell, in order to achieve a result that benefits all shareholders.
So much so that even though their image in the media has become that of ruthless corporate predators, even though the managers of American listed companies all give them a wide berth.
But Fortune magazine gave a positive affirmation from the perspective of shareholders and expressed the aspirations of another group of people - "Whether you believe it or not, they make more money for shareholders than any other speculation on the planet. There are many."
But Bernard Arnault is not like this.
First of all, the timing of his annexation of LVMH was just good luck. It was an unsophisticated person like Henry who got mad and took the initiative to come to his door. Otherwise, he would not have even the slightest chance.
Secondly, Bernard Arnault relies entirely on deceit and deception. He betrays when he betrays and plots when he plots against him. He is too selfish and stingy, and his ultimate goal is to keep all the benefits to himself.
Since morality has been lost, it is difficult to find real helpers.
In addition, he only relies on Lazard Investment Bank for funding.
He lacks professional financial capabilities. He neither knows how to issue junk bonds nor how to establish private equity funds. His methods are single and his funds are limited, resulting in high financing costs.
In fact, no matter how you look at it, it is difficult for him to succeed.
Even now that he is in the limelight, he has fished in troubled waters in LVMH's internal strife and has completely gained an absolute advantage.
But if you analyze it carefully, you can see that his strength is limited.
There are undoubtedly major hidden dangers in various aspects, and we are stepping on the trap of "unjust and unjust".
It can only be said that in the previous life that Ning Weimin experienced, this business war, which was regarded as the number one in Europe, was actually not a high-level battle.
The success of this little French wolf was largely due to luck, and it was a matter of accident.
The main reason is that the French financial industry market is too small, develops too slowly, and the qualifications for mergers and acquisitions are relatively restricted, which gave him, an outlier who didn't want to be a gentleman at all, an opportunity to take advantage of and develop.
Otherwise, if Americans also focus on the fat piece of LVMH, and if there are no restrictions on the shareholding ratio of foreigners, I am afraid that Bernard Arnault will have nothing to do with it.
So even Ning Weimin has little experience in corporate mergers and acquisitions, and entered the game late. It seems that the day lily has gone cold.
Although he did not have much funds, he could only rely on the hundreds of millions of dollars that he and Pierre Cardon scraped together to fish in troubled waters and take advantage of the second half.
Even though he is still Chinese, there is no way he can control the entire LVMH group.
But in fact, it really can’t be seen that simply.
In fact, Ning Weimin's disruption is not only the biggest variable in this business war.
It is destined to bring an unexpected turn to the final result of this business war.
Even for Bernard Arnault, the appearance of Ning Weimin means that he already has his own natural enemy.
First of all, Ning Weimin, a well-rounded man based on the Chinese business spirit, represents the good in business.
He values peace, knows how to share, pays attention to balance, and pays attention to integrity, which is contrary to the selfish and unethical French wolf in his behavior.
This ensures that his alliance is unbreakable and he has the advantage of getting more help.
Although he has not yet been recognized and valued by the fourth generation of LV, as long as Henry finds that it is impossible to obtain peace through appeasement, he will know what choice to make sooner or later.
Secondly, funding is not Ning Weimin’s disadvantage, but his biggest advantage.
On the surface, due to the influence exerted by Lazard Investment Bank, no bank in France is willing to lend money to people who want to help LV’s fourth generation.
But Ning Weimin's source of funds came from Japan at the height of the economic bubble. Japanese banks had already started crying and even kneeling down to beg for loans.
As long as he is willing, he has too many real estate properties and companies that can be used as collateral to obtain huge loans.
And the loan interest is much lower than that of banks in European and American countries.
How can it be compared to a French wolf backed by Lazard Investment Bank?
In fact, his "ammunition" is only superficially lacking, but the reality is that it is quite sufficient.
What's more, he doesn't seek control of LVMH.
As long as I can get LVMH shares at a low price, I will wait for dividends and enjoy the worship of vain people all over the world.
No matter what the final result is, it is a victory for him personally and he will be satisfied.
As for the end, Ning Weimin also had an exclusive advantage in timing, and no one could imitate it.
Even if Bernard Arnault entered the game first and already controlled 37.5% of the group's equity, he would not have as much advantage as him.
After all, he is a time traveler who can "predict the future" and has a time plug-in.
Looking at the calendar and counting the time, he certainly knew that the famous "Black Monday" in history was not far away.
Although due to the butterfly effect, the timing of the stock market crash that made the entire capitalist world tremble may not change, the general trend will not change.
What is absolutely certain is that this will eventually happen to stock speculators around the world.
For Ning Weimin, this is the best arbitrage opportunity with a guaranteed win and no loss.
If God is kind and allows him to be fully prepared and lay the groundwork, then it won't be a question of how much profit he can make personally.
There is a very high probability that he can help Henri Lacamie stand up in one fell swoop, avenge his past humiliation, and completely drive away the powerful enemy that dominates the magpie nest.
By the way, he can also promote the master to the board of directors of Louis Vuitton and repay his mentor and helpful friend with generous benefits.
So, even though Ning Weimin did what seemed the stupidest thing.
He and the master used CLSA, a brother company of Credit Agricole, to entrust a stock broker to start a two-way bet on the LVMH Group, which was already obviously at a high level.
We plan to spend 300 million US dollars to acquire shares first, and then start short selling after buying them.
Looking back, they will use Matsumoto Keiko's name to open an account and sell the same number of shares through securities lending.
But his psychology is indeed completely calm, let alone uneasy. He is not at all panicked about the stock price being pushed up further.
This has left CLSA’s stockbrokers and analysts collectively confused and confused.
No matter how hard they thought about it, they couldn't figure out the real intentions of these two big customers.
Because hedging in the securities lending game seems to be meaningless. If there is no extreme market trend of sudden rise and fall, it will only contribute fees and commissions to the securities companies in vain.
They never dreamed that someone could predict the occurrence of extreme market conditions in advance. They did this in order to wait for the best arbitrage opportunity and make the right layout in advance.
But then again, even if Ning Weimin had the upper hand and had thought of everything he could think of, he wouldn't be able to control everything.
No, an unexpected situation soon caused him to have new needs for funds.
Because Catherine Deneuve found him a few days later when he was just starting to make money, and because she recognized his character, she proposed to him that he could invest in the Yves Saint Laurent company. Require.
Ning Weimin never expected that sometimes the luck brought by his good character would also be a burden.
This is a sweet trouble.