Chapter 169： Hermes?
Now William Chen is facing the situation that he can lower the price, or even buy MGM for less than $1.5 billion, but he will have to take on MGM's debt of up to $3.5 billion and need to continue to support the company. The capital injection to allow them to start work requires at least guaranteeing the shooting of two of MGM's most important films - the 23rd installment of the "007" series and "Lord of the Rings: The Hobbit".
In this way, his overall acquisition of MGM requires at least $2 billion in cash, including the shooting funds of the two series of movies and the funds to maintain MGM's operations. Plus, take on $3.5 billion in debt that carries astronomical interest every year.
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 "The Lord of the Rings: The Hobbit", which MGM has repeatedly delayed at this time, are very good. The most important thing is , the acquisition of MGM, the ability to get his huge film library, these are what William Chen’s other investment company, Netflix, needs.
Later, after Amazon entered the streaming media market, it bought MGM for $8.5 billion. The most important gain was MGM's film library and the company's ability to produce film and television content.
Similarly, these are very important to Chen William.
MGM's current library contains all of the company's films 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 $1.45 billion. , But due to economic reasons, Turner owned MGM after just 74 days and then sold most of the shares back to Kerkorian, leaving only MGM's film and TV portfolio.
So now, Time Warner has 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 4,000 films and 17,000 TV episodes, among which the more well-known films include "007" series, "Rocky" series, "Wild Flowers", "Silence of the Lambs", "The Silence of the Lambs" Angry Bull, etc.
The most important thing is that although Chen William didn't know much about Hollywood in his previous life, he had seen some of those well-known films, at least he knew the names and general plots, so after he won MGM, he could also rely on it. 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, it is no longer among the top six in Hollywood, but now it is a time to buy the bottom. After buying it, it can still have a good development. , the worst, can be sold to Netflix in the end, I believe that Netflix will definitely be interested in MGM.
That is to say, Netflix is still developing, and its market value is not too high, so I dare not think about acquiring MGM. When Netflix develops, it will not be the current price if I want to buy it. .
However, compared with these companies in Hollywood, the development of Netflix with Internet genes is still fierce, but now he holds 37.6% of Netflix's shares. After all, Netflix is a listed company. If you continue to increase your holdings Going down, I am afraid that even if Chen William 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 Camilo 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 proved before. Although the negotiation this time is not easy, it will not be very difficult. Compared with 20th Century Fox, the acquisition of MGM is nothing more than a question of how much money to spend. As long as you want to buy it, you can definitely buy it.
20th Century Fox is different. Up to now, Murdoch has not given a very clear attitude, which makes William Chen somewhat at a loss, so he can only continue to wait patiently.
Camilo Hagen of Goldman Sachs also gave his opinion on William Chen's willingness to acquire luxury brands. Currently, 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 well-known brands such as LV, Dior, LOEWE, Celine, Fendi, and Bulgari, all of which belong to the largest luxury brand company - LVMH Group, this group Has more than 50 luxury brands.
Richemont Group ranks second, owning Cartier, Jaeger-LeCoultre, Vacheron Constantin, Marlboro, Dunhill and other brands; while Kering Group, which ranks third, owns brands such as Saint Laurent, Alexander McQueen and Pomelto.
However, since it is said to be almost all brands, there are also those who have slipped through the net, such as the pearl of luxury goods - Hermès Hermes.
Hermès is still a family-run business. Members of the Hermès family hold more than 70% of the shares of Hermès International, and only less than 30% of the shares in circulation.
From this point of view, it seems that Hermes is difficult to be acquired, but you must know that the Hermes family has developed to the sixth generation and has many family members. More than 70% of the shares are scattered in the hands of 72 adult family members, of which the six families hold the most shares. Members, the shares held by each person are only between 5-10%, which shows how dispersed the family's holdings are.
Therefore, this situation also provides the possibility of acquisition. As long as enough Hermes international stocks are absorbed in the secondary market, and then scattered acquisitions are made from family members, and a certain proportion can be reached, the public acquisition of Hermes can be carried out. Ultimate control of the Hermès brand.
According to Camilo Hagen's survey, the French stock market is also affected by the subprime mortgage crisis. The stock price of Hermès International has dropped from more than 100 euros to less than 60 euros, which also represents the current situation of Hermès International. The market value is about 6.7 billion euros, which is equivalent to about 9 billion US dollars.
Even if the premium of Chen William at the time of the acquisition is calculated, then with 10 billion US dollars, it should be enough to control Hermes International.
Hearing Camilo Hagen's suggestion, William Chen shook his head. In his opinion, the acquisition of Hermès would not be so optimistic, because he knew that in his previous life, there were also people who were interested in acquiring Hermès. The person is Bernard Arnault, the owner of the world's largest luxury goods group, the LVMH group.
At that time, he also valued the weakness of the Hermes family's shareholding. First, he used the means to quietly acquire 17.1% of Hermès International shares in the secondary market by means of drop-in options - because according to the regulations of the French stock market, in the secondary market If the market acquires more than 5% of the other party's stock, the purpose of the acquisition must be publicized. Therefore, Bernard used some means to acquire the shares of Hermes International by betting with some institutions, so that the stock he actually holds is less than 5%. No public announcement is required.
After the bet expired, the stocks of those institutions belonged to Bernard—because the content of his bet was to bet against the other party that the stock price of Hermes would rise, and he would buy these stocks whether it rose or not. - So in this way, he suddenly announced that he became the second largest shareholder of Hermès, second only to the Hermès family, and continued to absorb the shares of Hermès International.
However, his raid ended in failure. The Hermès family showed unprecedented unity. More than 50 family members injected their shares into a holding company and promised not to sell these shares for 20 years. The company holds more than 50% of Hermès International shares, and other family members have promised that if the shares in their hands are sold, the holding company has the right of first refusal.
So here, the wishful thinking of LVMH Group to acquire Hermes has failed, so Bernard has failed. However, the shares of Hermès International he absorbed during this period made him more than 1 billion euros due to the rise, which can be regarded as compensation.
Through this matter, Chen William knew that it would be difficult to acquire and control Hermes by means of an assault, which is why he shook his head.
However, Bernard’s acquisition of Hermes failed, and he used this method countless times before to acquire those luxury brands managed by the family. He was successful, and he would inevitably relax. Therefore, the timing of the public acquisition was too early, and he did not expect Hermes. Family unity.
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In this way, his overall acquisition of MGM requires at least $2 billion in cash, including the shooting funds of the two series of movies and the funds to maintain MGM's operations. Plus, take on $3.5 billion in debt that carries astronomical interest every year.
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 "The Lord of the Rings: The Hobbit", which MGM has repeatedly delayed at this time, are very good. The most important thing is , the acquisition of MGM, the ability to get his huge film library, these are what William Chen’s other investment company, Netflix, needs.
Later, after Amazon entered the streaming media market, it bought MGM for $8.5 billion. The most important gain was MGM's film library and the company's ability to produce film and television content.
Similarly, these are very important to Chen William.
MGM's current library contains all of the company's films 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 $1.45 billion. , But due to economic reasons, Turner owned MGM after just 74 days and then sold most of the shares back to Kerkorian, leaving only MGM's film and TV portfolio.
So now, Time Warner has 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 4,000 films and 17,000 TV episodes, among which the more well-known films include "007" series, "Rocky" series, "Wild Flowers", "Silence of the Lambs", "The Silence of the Lambs" Angry Bull, etc.
The most important thing is that although Chen William didn't know much about Hollywood in his previous life, he had seen some of those well-known films, at least he knew the names and general plots, so after he won MGM, he could also rely on it. 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, it is no longer among the top six in Hollywood, but now it is a time to buy the bottom. After buying it, it can still have a good development. , the worst, can be sold to Netflix in the end, I believe that Netflix will definitely be interested in MGM.
That is to say, Netflix is still developing, and its market value is not too high, so I dare not think about acquiring MGM. When Netflix develops, it will not be the current price if I want to buy it. .
However, compared with these companies in Hollywood, the development of Netflix with Internet genes is still fierce, but now he holds 37.6% of Netflix's shares. After all, Netflix is a listed company. If you continue to increase your holdings Going down, I am afraid that even if Chen William 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 Camilo 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 proved before. Although the negotiation this time is not easy, it will not be very difficult. Compared with 20th Century Fox, the acquisition of MGM is nothing more than a question of how much money to spend. As long as you want to buy it, you can definitely buy it.
20th Century Fox is different. Up to now, Murdoch has not given a very clear attitude, which makes William Chen somewhat at a loss, so he can only continue to wait patiently.
Camilo Hagen of Goldman Sachs also gave his opinion on William Chen's willingness to acquire luxury brands. Currently, 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 well-known brands such as LV, Dior, LOEWE, Celine, Fendi, and Bulgari, all of which belong to the largest luxury brand company - LVMH Group, this group Has more than 50 luxury brands.
Richemont Group ranks second, owning Cartier, Jaeger-LeCoultre, Vacheron Constantin, Marlboro, Dunhill and other brands; while Kering Group, which ranks third, owns brands such as Saint Laurent, Alexander McQueen and Pomelto.
However, since it is said to be almost all brands, there are also those who have slipped through the net, such as the pearl of luxury goods - Hermès Hermes.
Hermès is still a family-run business. Members of the Hermès family hold more than 70% of the shares of Hermès International, and only less than 30% of the shares in circulation.
From this point of view, it seems that Hermes is difficult to be acquired, but you must know that the Hermes family has developed to the sixth generation and has many family members. More than 70% of the shares are scattered in the hands of 72 adult family members, of which the six families hold the most shares. Members, the shares held by each person are only between 5-10%, which shows how dispersed the family's holdings are.
Therefore, this situation also provides the possibility of acquisition. As long as enough Hermes international stocks are absorbed in the secondary market, and then scattered acquisitions are made from family members, and a certain proportion can be reached, the public acquisition of Hermes can be carried out. Ultimate control of the Hermès brand.
According to Camilo Hagen's survey, the French stock market is also affected by the subprime mortgage crisis. The stock price of Hermès International has dropped from more than 100 euros to less than 60 euros, which also represents the current situation of Hermès International. The market value is about 6.7 billion euros, which is equivalent to about 9 billion US dollars.
Even if the premium of Chen William at the time of the acquisition is calculated, then with 10 billion US dollars, it should be enough to control Hermes International.
Hearing Camilo Hagen's suggestion, William Chen shook his head. In his opinion, the acquisition of Hermès would not be so optimistic, because he knew that in his previous life, there were also people who were interested in acquiring Hermès. The person is Bernard Arnault, the owner of the world's largest luxury goods group, the LVMH group.
At that time, he also valued the weakness of the Hermes family's shareholding. First, he used the means to quietly acquire 17.1% of Hermès International shares in the secondary market by means of drop-in options - because according to the regulations of the French stock market, in the secondary market If the market acquires more than 5% of the other party's stock, the purpose of the acquisition must be publicized. Therefore, Bernard used some means to acquire the shares of Hermes International by betting with some institutions, so that the stock he actually holds is less than 5%. No public announcement is required.
After the bet expired, the stocks of those institutions belonged to Bernard—because the content of his bet was to bet against the other party that the stock price of Hermes would rise, and he would buy these stocks whether it rose or not. - So in this way, he suddenly announced that he became the second largest shareholder of Hermès, second only to the Hermès family, and continued to absorb the shares of Hermès International.
However, his raid ended in failure. The Hermès family showed unprecedented unity. More than 50 family members injected their shares into a holding company and promised not to sell these shares for 20 years. The company holds more than 50% of Hermès International shares, and other family members have promised that if the shares in their hands are sold, the holding company has the right of first refusal.
So here, the wishful thinking of LVMH Group to acquire Hermes has failed, so Bernard has failed. However, the shares of Hermès International he absorbed during this period made him more than 1 billion euros due to the rise, which can be regarded as compensation.
Through this matter, Chen William knew that it would be difficult to acquire and control Hermes by means of an assault, which is why he shook his head.
However, Bernard’s acquisition of Hermes failed, and he used this method countless times before to acquire those luxury brands managed by the family. He was successful, and he would inevitably relax. Therefore, the timing of the public acquisition was too early, and he did not expect Hermes. Family unity.
American Road to Fame https://
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