Chapter 217: The Zhongba Acquisition War (Part 1)
"Yes, someone will definitely be tempted," Huang Yaonan nodded.
"That's enough—we're only short 5%," Yang Wendong said with satisfaction. "How has Zhongba's cash flow been over the past few months?"
Huang Yaonan replied, "They've spent quite a lot. Yan Chengkun bought over a hundred buses from the UK, acquired new route franchises from the colonial government, and picked up various roadside properties. Most of their financing has already been used up."
Yang Wendong laughed, "All that in just a few months? He's already spent millions?"
"Mr. Yang Wendong, this is a capital-heavy business. Routes and imported buses are very expensive," Huang Yaonan explained. "But once the investment is made, losses are nearly impossible.
As long as the routes operate and revenue starts coming in, he can use that as collateral to apply for further loans."
"True," Yang Wendong nodded. Public transportation required massive up-front investment. Then he added, "If he's nearly out of cash, then this is the best time for us to strike."
"Exactly," Huang Yaonan agreed. "This is the Yan family's most vulnerable moment."
Yang Wendong added, "Mr. Huang Yaonan, there's one more thing—on the surface, this acquisition must look like it's your battle against the Yan family for control of Zhongba. I'm just your financial backer, helping on behalf of your family."
Targeting a Chinese-owned publicly listed company was still too sensitive in this era. But since the Huang family was one of Zhongba's founders and had long been sidelined, taking back control was perfectly reasonable in the eyes of the public.
"Understood," Huang Yaonan nodded.
Although Yang Wendong would eventually take controlling ownership, per their agreement, the company would be managed by the Huang family. This acquisition was, on the surface, a move by the Huang family to reclaim their rightful place.
"What should I do next?" Huang Yaonan asked.
Yang Wendong smiled. "Figure out how you plan to run Zhongba after we win."
...
A few days passed, and by the end of the month—
June 29, Ta Kung Pao broke the news: Liu Baoshan of Liu Chong Hing Bank had died of a cerebral infarction.
"Once a bank has experienced a run, recovery is almost impossible," Yang Wendong sighed as he read the paper.
He had never considered entering banking for this very reason—the risk was too high. Liu Chong Hing's failure wasn't even due to blatant illegality. Even a well-run bank like Hang Seng would face a run a few years later and end up being swallowed by foreign capital.
Each era had its own opportunities, as well as industries that weren't worth touching. In the British colonial era, running a bank was too dangerous.
Small banks were tolerated—they were allowed to sip from the bowl. But once a Chinese bank grew large enough to pose a threat to British banks, it would face the same fate as Hang Seng.
Beside him, Zheng Zhijie commented, "Yes, Liu Baoshan passed away yesterday. Supposedly, it was because he couldn't accept the fact that HSBC and Standard Chartered had taken over most of his bank's business. He already had underlying health problems, and this just pushed him over the edge."
"I imagine the Liu family will be extremely conservative from now on," Yang Wendong said. "There's not much outsiders can do to help. But if they ever need support, we can give them small, low-risk projects. It's the least we can do for a former partner."
"Understood," Zheng Zhijie nodded. "Also, Mr. Huang Yaonan completed the stock purchase from Liu Yulin. Combined with the shares we've quietly acquired, we now hold 45%.
Per your previous instructions, I was planning to begin open-market purchases tomorrow."
"Wait until July 1," Yang Wendong said. "I've already spoken with Qin Zhiye. On that day, Ganghua Daily will run a front-page article heavily praising the future of Hong Kong's transportation industry and the colonial government's infrastructure investments.
They'll also feature financial experts hyping transportation-related companies like Zhongba.
The commercial radio station will echo these themes, even launching a new segment focused on buses—like which line to take to get where. After we acquire that radio station in the future, it'll be even more useful."
Zheng Zhijie instantly understood. "You want the stock price to rise quickly during our buying spree—and this will give people a reason?"
"Exactly," Yang Wendong nodded. "If the price jumps without a clear reason, it'll look suspicious.
Even though I believe we're almost guaranteed to win, once the takeover begins, it has to be like a lion pouncing on a rabbit—swift and decisive, with no complications.
The Yan family still has connections in Hong Kong. The longer we take, the more likely they'll find allies. Even if we still win, it'll cost us more."
Truly successful corporate takeovers were fast and clean—preferably through negotiation. Like war, blitzkrieg was the path to victory.
People loved to talk about drawn-out battles like Tung Chao Yung's two-year fight with Jardines for control of Wharf. Yes, it ended with success and glowing headlines—but the truth was, it nearly bled him dry.
While his strategic goals were met, the toll on his company was massive. It took years to recover.
Zheng Zhijie nodded. "Got it. Tomorrow, I'll even sell a small batch of shares to push the price down a bit. Zhongba's stock has been rising steadily over the past month.
If it weren't for the broader market also rising, Yan Chengkun might have noticed something already."
"Good," Yang Wendong said.
During a takeover, it wasn't always about constant buying—sometimes, selling a little could throw off your opponent.
...
July 1 — Zhongba Headquarters
Yan Chengkun had just entered his office and hadn't even had a sip of water when his secretary rushed in.
"Mr. Yan, Sing Tao Daily ran a long article today about Hong Kong's future road plans. They also praised our company's potential and recommended investors buy Zhongba stock!"
"Oh? Sing Tao Daily? That's a major paper," Yan Chengkun smiled, taking the newspaper.
He read for a while, then frowned.
The secretary noticed his change in expression and asked cautiously, "Mr. Yan, is something wrong?"
Yan Chengkun muttered uncertainly, "The article's description of the government's road construction plans doesn't quite match what I know.
And the whole piece—though supposedly about infrastructure—is clearly more focused on promoting a few transportation-related companies' stocks. Not just ours, but also road construction firms and taxi companies."
The secretary thought for a moment and said, "It seems reasonable, doesn't it? The stock market has outperformed the real estate sector over the past six months. Clearly, the public is more interested in stocks now. Sing Tao Daily is just following the market's appetite by recommending stocks. Nothing unusual."
Yan Chengkun shook his head. "Them doing this is normal. But doing it without charging a fee? That's what's strange. Who recommends stocks for free?"
"Maybe they're testing the waters," the secretary said after thinking about it. "They could be trying to see if they have enough influence over the market. If they do, they'll start charging companies later. Big profit."
"That's a possibility."
Yan Chengkun couldn't think of any better explanation, so he let the matter drop.
The secretary then said, "Mr. Yan, here's last month's budget summary, total expenditure was..."
Yan Chengkun listened carefully. When the secretary finished, he nodded. "It's acceptable. We spent a lot, but we gained over ten new routes, more than a hundred buses, and quite a few roadside properties."
"Alright, I'll pass this to Finance," the secretary said.
"Good." Yan Chengkun nodded.
...
Just before noon, the secretary came rushing back.
"Mr. Yan, something's off with the stock market. In just one morning, our stock has gone up by 10%."
"Ten percent? In half a day?" Yan Chengkun was stunned.
If it had gained 10% over a week, he would've been delighted. But in just half a day? That was too fast—almost unbelievable.
The secretary said, "We're surprised too. I sent someone to the stock exchange. They identified several buyers of our stock. We questioned them, and they all said they bought because of the positive article in Sing Tao Daily."
Yan Chengkun frowned. "A newspaper article caused our market cap to rise by HK$2–3 million? That seems too much."
The secretary said, "Mr. Yan, the rise in value isn't real cash—it's just paper gains. Most likely, it only took a few hundred thousand dollars of real capital to trigger the buying momentum and push the stock price up."
"Hm, makes sense. The stock market really is strange," Yan Chengkun nodded. "Keep a close eye on it. If a single article can influence prices this much, we should make good use of it when we use our shares as collateral for loans."
"Understood," the secretary replied.
...
That afternoon, Yang Wendong waited at a hotel near the Hong Kong Stock Exchange for updates.
After a while, Wang Lianhua from Standard Chartered, who was overseeing the acquisition, came in.
"Mr. Yang Wendong, our team managed to acquire 0.45% of Zhongba's shares in a single morning. Due to the buying spree back in February and March, there aren't many shares left in circulation. Our purchases, combined with retail investors jumping in after the price surge, pushed the stock up nearly 10%."
"Should we keep buying?" Yang Wendong asked.
Wang Lianhua replied, "We need to slow down. If we keep buying aggressively, it'll be obvious. Even though we have the upper hand now, exposing ourselves too early could make the final stretch far more costly.
It's safer to wait until we have 50% before going public. So this afternoon, I'll sell a small batch to bring the price down, and we'll resume buying tomorrow."
Yang Wendong nodded. "There aren't many shares in the open market. How long do you estimate before we reach 5%?"
They had previously estimated that less than 15% of Zhongba's total shares were still circulating. Acquiring another 5% would take precision.
"Ten days, give or take," Wang Lianhua said. "But I can't guarantee Yan Chengkun won't catch on in the final few days."
"If he finds out near the end, it doesn't matter," Yang Wendong said with a calm smile. "We'll just pay more to finish the job. It's a small price to pay."
...
Three days later, Zhongba's stock had experienced sharp rises and dips, catching the attention of investors and Zhongba's own management.
"Someone's buying our stock—and in large amounts."
At a board meeting, Yan Chengkun entered with a grim face and said, "I just spoke to Mr. Ho from Hang Seng Bank. He confirmed—someone with major capital is acquiring our company's shares."
"Whoa!" The board members began murmuring and glancing around.
Yan Chengkun fixed his eyes on the unusually silent Huang Yaonan and said coldly, "Nephew Huang, this wouldn't have anything to do with you, would it?"
"Uncle Yan, you must be joking," Huang Yaonan said with a calm smile. "Under your excellent leadership, Zhongba's stock is performing exceptionally well. How could I possibly afford to buy so many shares?"
He chose his words carefully. This was a board meeting, and even if he planned to take over the company, he still needed support from those present. He couldn't be caught lying blatantly.
"You couldn't do it alone, but clearly, you're not alone," Yan Chengkun sneered. "Without your shares, who would care to acquire Zhongba stock? There's no strategic value—unless it's part of a larger plan."
"Uncle Yan, I'd never dare claim to be anyone's accomplice," Huang Yaonan said with mock innocence. "It's purely an investment."
"Who's behind this?" Yan Chengkun pressed.
Without knowing his enemy, he couldn't organize a counterattack. And he needed to know how much of the company the other side already controlled.
"I can't say," Huang Yaonan replied. Of course he wouldn't reveal the truth.
Publicly, the takeover was a family matter—Huang versus Yan. Yang Wendong's involvement had to remain behind the curtain.
"Hmph," Yan Chengkun grunted. "Then let's see what happens. Hang Seng has agreed to fully support me. I want to see just how deep your backer's pockets run!"
"Hang Seng?" Huang Yaonan's brow twitched.
The timing couldn't have been worse. They were just days away from success. If Hang Seng Bank joined the fray, it could disrupt Yang Wendong's entire plan. An open counter-acquisition would drive up the share price rapidly. Would Yang Wendong still be willing to pay the price?
"The meeting is adjourned. Gentlemen, our stock is about to soar—be smart with your holdings," Yan Chengkun declared.
Huang Yaonan looked silently at the other board members.
Once the meeting ended, he rushed to a phone booth outside and dialed a number.
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