SFS Chapter 170 Hermes?
Chapter 170 Hermes?
Chapter 170 Hermes?
The situation facing William Chen now is that he can lower the price, and even buy MGM for less than US$15 billion, but he will have to bear MGM’s debt of up to US$35 billion and continue to work for the company. Injecting capital so that they can start work, at least they need to guarantee the shooting of the two most important films of MGM-the 007rd part of the "23" series and "The Lord of the Rings: The Hobbit".
Calculated in this way, he needs to spend at least 20 billion US dollars in cash for the overall acquisition of MGM, including the funds for the shooting of the two series of movies and the funds to maintain MGM's operations.In addition, it has to bear $35 billion in debt, and the annual interest on these debts is astronomical.
So, is it worth paying these prices to acquire MGM?
In Chen William's view, it is still very worthwhile, and he also knows that the box office of the 23rd "007" and "Lord of the Rings: The Hobbit", which MGM has repeatedly delayed at this time, are both very good. , Acquiring MGM, and being able to obtain his huge film library, these are what Chen Williams needs in another company invested by Netflix.
Later, after Amazon entered the streaming media market, it bought MGM for $85 billion. The most important gain was MGM's film library and the company's ability to produce film and television content.
Similarly, these are also very important to William Chen.
At present, MGM's film library has all the films of this company since 1986.
The reason is that MGM has been sold back and forth many times in history. In 1986, Kerkorian, the owner of MGM at the time, sold MGM to Ted Turner for $14.5 billion. , but due to economic reasons, Turner owned MGM for just 74 days and then sold most of the shares back to Kerkorian, leaving only MGM's film and TV works.
So now, Time Warner owns MGM's film library before 1986, and MGM's own film library only has the copyright of its films after 1986.
MGM’s film library at this time includes more than 4000 movies and 17000 episodes of TV series. Among them, the more well-known films include the "007" series, "Rocky" series, "Thelma and Louise", "The Silence of the Lambs", " Raging Bull, etc.
Most importantly, although William Chen didn't know much about Hollywood in his previous life, he has watched those well-known movies, at least he knows the name and the general plot, so after winning MGM, he can also rely on With these experiences, to help MGM turn a profit.
Therefore, after the overall analysis, MGM is still worth buying. Although MGM is different from the past and is no longer among the top six in Hollywood, it is still a good time to buy the bottom. After buying it, it can still have a good development. , at worst, it can be sold to Netflix in the end. I believe that Netflix will definitely be interested in MGM by then.
That is to say, Netflix is still developing, and its market value is not too high, so I dare not think about buying MGM. After Netflix develops later, it will not be the current price if I want to buy it. up.
However, compared with these companies in Hollywood, Netflix, which has Internet genes, is still developing rapidly, but now he holds 37.6% of Netflix’s shares, which is already a limit. After all, Netflix is a listed company. Going on, I am afraid that even if William Chen has an agreement to support Hastings, the other party will feel a sense of crisis and will try to dilute his shares.
And if William Chen personally holds too many shares, it may also affect the market's view of Netflix, and his stock price may not be able to reach too high in the future.
Now that the decision has been made, William Chen notified Camillo Hagen of Goldman Sachs, and began to represent him, with MGM's management and creditors, to start substantive negotiations on the acquisition of MGM.
The basic attitude of the other party has also been ascertained before. Although the negotiation this time is not easy, it will not be very difficult.Compared with [-]th Century Fox, the acquisition of MGM is nothing more than a question of how much money to pay. As long as you want to buy it, you can definitely buy it.
Twentieth Century Fox is different. Until now, Murdoch has not given a clear attitude, which makes Chen William a little bit at a loss, and can only continue to wait patiently.
Camilo Hagen of Goldman Sachs also expressed his opinion on Chen William’s willingness to acquire luxury brands. At present, there are three major luxury brand groups in the world, namely LVMH Group, Richemont Group and Kering Group.
These three luxury groups gather almost all luxury brands, including the familiar LV, Dior, LOEWE, Celine, Fendi, and Bulgari, all of which belong to the largest luxury brand company - LVMH Group. The group owns more than 50 luxury brands.
Richemont Group ranks second, owning brands such as Cartier, Jaeger-LeCoultre, Vacheron Constantin, Marlboro, and Dunhill; Kering Group, which ranks third, owns brands such as GUCCI, Yves Saint Laurent, Alexander McQueen, and Pomellato.
But since it is almost all brands, there are also fishes that slipped through the net of these groups, such as the pearl of luxury-Hermès Hermes.
Hermes is still a family-run business. Hermes family members hold more than 70% of the shares of Hermes International, and less than 30% of the shares in circulation.
From this point of view, Hermes seems to be difficult to be acquired, but you must know that the Hermes family has developed to the sixth generation, with many family members, and more than 70% of the shares are scattered in the hands of 72 adult members of the family, of which the six families with the most shares Members, the shares held by each person are only between 5-10%, which can also be seen how scattered the family's shareholding is.
Therefore, this situation also provides the possibility for acquisitions. As long as enough Hermes international stocks are absorbed in the secondary market, and then fragmented acquisitions are made from family members, and a certain proportion can be reached, Hermes can be publicly acquired. Ultimate control of the Hermes brand.
According to Camillo Hagen's survey, the current French stock market is also affected by the subprime mortgage crisis. The stock price of Hermes International has dropped from more than 100 euros to less than 60 euros, which also represents the current situation of Hermes International. The market value is around 67 billion euros, which is roughly equivalent to around 90 billion US dollars.
Even if the premium paid by Chen William at the time of acquisition is calculated, then US$100 billion should be enough to hold Hermes International.
Hearing Camilo Hagen's suggestion, Chen William shook his head. In his opinion, the acquisition of Hermes would not be so optimistic, because he knew that in his previous life, some people also wanted to acquire Hermes. People are Bernard Arnault, owner of LVMH Group, the world's largest luxury goods group.
At that time, he also paid attention to the weakness of the Hermès family's scattered equity. First, he used means to quietly acquire 17.1% of Hermès International shares in the secondary market through the way of down-price options-because according to the regulations of the French stock market, in the second If the super market acquires more than 5% of the other party's stock, the purpose of the acquisition must be announced. Therefore, Bernard used some means to acquire Hermès International stock by making a bet with some institutions, so that he actually holds less than 5% of the stock. , without publicity.
After the bet expires, the stocks of those institutions belong to Bernard—because his bet is that the stock price of Hermès will rise, and he will buy these stocks regardless of whether it rises—so with this In this way, he suddenly announced that he became the second largest shareholder of Hermes, second only to the Hermes family, and continued to absorb shares of Hermes International.
However, his raid ended in failure. The Hermes family showed unprecedented unity. More than fifty family members injected their shares into a holding company, promising not to sell these shares within 20 years, making this holding company The shares held by Hermes International exceed 50%, and other family members also promise that if the shares in their hands are sold, the holding company has the right of first refusal.
So at this point, the wishful thinking of the LVMH Group to acquire Hermes has come to nothing, so Bernard has failed.However, the Hermès international stock he absorbed, due to the rise during this period, made him earn more than 10 billion euros, which can be regarded as compensation.
Through this incident, William Chen knew that it would be very difficult to acquire and control Hermès by surprise, which was why he shook his head.
However, Bernard’s failure to acquire Hermes is also because he has used this method countless times before to acquire those family-managed luxury brands. Family unity.
(End of this chapter)