Chapter 430 Controlling Stake? Why Not Launch a Full Acquisition Instead!
After ending his call with Dai Shi, Ma Shimin did not hesitate to dial another number.
This time, he called Lin Haoran's private line at his hotel in Chicago.
Considering the time zone difference, Hong Kong was fifteen hours ahead of Los Angeles.
Thus, while it was just past noon under the bright midday sun in Hong Kong, it was still a quiet evening, around 9 PM, in Los Angeles.
At that hour, while it wasn't deep into the night, most people would have wrapped up their daily affairs and returned to their hotels or homes to rest.
Ma Shimin guessed that Lin Haoran had likely finished his schedule and returned to his hotel.
Sure enough, the moment he pressed the dial button, Lin Haoran's voice immediately answered from the other end.
Hearing Ma Shimin's call, Lin Haoran was somewhat surprised.
According to his original itinerary, he had planned to return to Hong Kong the day after tomorrow.
Just this morning, he had called Ma Shimin from Los Angeles to explain his intention to acquire Hong Kong Telephone Company and to discuss his cooperation plans with Motorola.
Now, only twelve hours later, Ma Shimin was calling him again.
Lin Haoran wondered: had there already been progress or good news regarding Hong Kong Telephone Company?
"Boss, you're amazing—your guess was spot on! Yes, there's indeed news, and it's very good news!" Ma Shimin said excitedly, before recounting everything that had happened that morning in great detail.
After listening carefully, Lin Haoran fell silent for a moment, clearly digesting all the information.
Then his voice returned, tinged with a hint of amusement: "Mr. Ma, well done. Things are progressing faster and more smoothly than I expected. This Dai Shi is truly capable—his ability is no less than Su Zhixue's!"
Previously, Lin Haoran had worried whether Dai Shi could manage without Su Zhixue overseeing the Hong Kong branch. But it now appeared that Dai Shi was entirely reliable.
"Yes, Boss, President Dai and his team have demonstrated exceptional professionalism and operational skills during the acquisition of Hong Kong Telephone Company. Based on the current trend, we are confident that we can complete the 34.9% target today while maintaining a very reasonable cost.
Moreover, even after reaching this goal, there will likely still be plenty of low-priced shares available for further acquisition.
Unfortunately, the Securities and Futures Commission changed the rules a month ago—lowering the merger and acquisition trigger threshold from 50% to 35%. Otherwise, we would be more than happy to continue absorbing shares," Ma Shimin said with a slight hint of regret.
After Lin Haoran's successful acquisition of Jardines Matheson and his indirect control of the company, the Securities and Futures Commission had moved swiftly to amend regulations.
They lowered the threshold from 50% to 35% to prevent large-scale hostile takeovers of British-owned enterprises by Chinese conglomerates.
The government clearly went to great lengths to protect British business interests.
After hearing this, Lin Haoran paused briefly, then asked, "Is Hong Kong Telephone Company classified as a public utility listed enterprise?"
"No, Boss, it's not," Ma Shimin replied without hesitation.
"Then is it possible for us to launch a full acquisition of it?" Lin Haoran pressed further.
"Under normal circumstances, yes," Ma Shimin confirmed.
Then he asked, "Boss, are you considering a full acquisition of Hong Kong Telephone Company?"
Lin Haoran chuckled lightly on the other end of the line and answered, "Yes, I just had that idea. Initially, I thought Hong Kong Telephone Company would be like Hongkong Electric Holdings, where privatization would be complicated.
But since it isn't a public utility listed company, those restrictions don't apply. I'm very optimistic about this company.
The communications industry—both now and in the future—will always be critical. Even though it may not grow as explosively as sectors driven by market booms or policies, its stability is unmatched.
Moreover, telecom companies usually possess massive cash flow, just like Hong Kong and China Gas Company.
More importantly, Hong Kong Telephone Company currently enjoys a monopoly in Hong Kong, and even if competitors emerge in the future, it will be very difficult to wrest away its market share.
If we successfully complete a full acquisition, Hong Kong Telephone Company will become a major pillar for Jardines Matheson Group, providing stable and continuous revenue and cash flow."
In his past life, Lin Haoran recalled that Hong Kong Telephone Company had once been aggressively targeted during the "Dawn Raid" by Jardines Matheson and other groups.
They had managed to acquire about 34.9% of the company's shares, becoming the largest shareholder.
However, after the Hong Kong real estate bubble burst, Jardines Matheson, weighed down by debt from reckless investments, was forced to sell off its stake.
Eventually, Cable & Wireless, which had long coveted Hong Kong Telephone Company, swooped in and acquired it.
By 1987, Cable & Wireless merged Hong Kong Telephone Company with its other Hong Kong businesses to form Hong Kong Telecom (HKT), which then became the dominant integrated telecom operator throughout the 1990s.
Later, Richard Li's Pacific Century CyberWorks acquired HKT for HK$78 billion, merging it into what became PCCW.
Lin Haoran remembered all this vividly.
Right now, Hong Kong Telephone Company was valued at just over HK$2 billion—a bargain compared to its future worth.
Besides, with Lin Haoran's presence in this timeline, Hong Kong's business landscape had already been dramatically altered.
By setting his sights on Hong Kong Telephone Company, Lin Haoran had effectively blocked Cable & Wireless's future ambitions.
As for whether Richard Li's group would ever get another chance, that remained to be seen.
If someday Lin Haoran no longer found Hong Kong Telephone Company worth holding, he might consider selling it.
But for at least the next decade or two, he intended to hold onto it firmly.
"Jardines Matheson currently has abundant funds, and Hong Kong Telephone Company's valuation is modest. A full acquisition is entirely feasible.
It's a premium enterprise, and I truly hope we can bring it into Jardines Matheson's fold.
However, if we decide to pursue a full acquisition, we'll need to submit comprehensive documentation to the Securities and Futures Commission—fully disclosing all information to shareholders, including detailed offer terms, our intentions, and professional opinions from financial advisors.
It's a complex process, and we haven't prepared any of it yet," Ma Shimin said after careful thought.
"Honestly, whether we go for a full acquisition or not doesn't matter to me," Lin Haoran said. "What matters is increasing our shareholding as much as possible.
Owning just 34.9% feels insufficient to me. Ideally, I'd like to own more than 50%.
If we can push toward privatization, that would be perfect."
"Boss, that actually makes things easier," Ma Shimin said. "Triggering a takeover offer is just part of the process. Whether a full acquisition succeeds depends on many factors.
Even after triggering a mandatory offer, if major shareholders refuse to sell, the acquisition could technically fail.
In that case, our burden would lessen.
According to the rules, only when we hold more than 90% of the shares can we initiate a compulsory acquisition.
This was how you were able to fully privatize Jardines Matheson, Green Island Cement, and Man Wah Holdings—because we eventually held over 90% of their shares."
"But Hong Kong Telephone Company is special," Ma Shimin continued. "Even though it's not a public utility, it's a critical external communications hub for Hong Kong.
Thus, even if we initiate a takeover, I suggest we avoid full privatization.
Keeping it listed would prevent political backlash and minimize government interference."
After hearing this, Lin Haoran nodded approvingly.
"Alright," he said, "we'll maintain Hong Kong Telephone Company's listing status. As for our shareholding percentage—whether it's 50% or 70%—adjust it flexibly based on market conditions and strategic needs.
Jardines Matheson has ample funds now. You can proceed boldly!"
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