Chapter 197 Nothing but a Farce
Half an hour later, Lin Haoran and Chen Shoulin received Li Mingze.
To Lin Haoran's surprise, Li Mingze hadn't come alone—he brought along the three other major Chinese shareholders of China Gas Company.
As a result, Chen Shoulin's office felt noticeably cramped.
"Mr. Li, Happy New Year! I haven't even had the chance to visit you yet, and here you are coming over. As a junior, I feel quite embarrassed," Lin Haoran said with a smile.
After exchanging greetings, everyone sat down.
"Mr. Lin, I'll get straight to the point. I believe you already have an idea why we're here. Indeed, we've come because of Jardines Matheson's actions regarding China Gas Company. We hope you can step in and save China Gas, preventing it from falling into their hands," Li Mingze said directly without waiting for Lin Haoran to inquire.
"Mr. Li, gentlemen, to be frank, we're all in business to make money. No one is willing to intervene at high cost without any profit. As for China Gas's current share price, if I step in, I might only succeed in increasing my holdings, allowing us to surpass Jardines Matheson's share. But what concrete benefits would I gain from that?" Lin Haoran smiled and countered.
If stepping in cost him heavily without any gain, wouldn't he just be a fool?
"Mr. Lin, we considered that before coming. Naturally, we wouldn't let you act for free. As long as Jardines Matheson's assault fails, we are willing to hand over control of China Gas Company to you, including the position of Chairman of the Board. We can put all of this into a formal agreement," Li Mingze replied.
"Mr. Li, you know very well that I have long been interested in acquiring China Gas Company. I previously approached you to purchase shares, but you refused—likely because of price concerns.
To be honest, it's difficult now to wrestle China Gas back from Jardines Matheson, but I might still succeed, because I have the resources.
As far as I know, the four of you collectively hold just under 33%. If I could acquire all your shares, my chances would be much greater. May I ask, under what terms would you sell your shares to me?" Lin Haoran asked bluntly.
Just becoming chairman wasn't enough for him.
Without enough shares, even if the company made big profits, his share of the dividends would be minimal.
He aimed for true control: absolute majority shareholding!
"Mr. Lin, do you really believe you can prevent Jardines Matheson from taking over China Gas Company?" Li Mingze asked seriously.
At this point, Li Mingze no longer hoped for control. His minimum goal was simply to block Jardines Matheson's acquisition.
Because now, he had no choice. His own holding was just over 10%, and with the others combined, they barely reached 33%. How could they compete with Jardines Matheson's 40.7%?
"As a matter of fact, I do believe I can, provided you agree to sell me your shares. To demonstrate my sincerity, I am willing to purchase your shares at the current market price announced today by Jardines Matheson. That's already a big show of good faith. If you agree, I can guarantee that Jardines Matheson's announcement today will be nothing but a farce. We also increased our holdings this afternoon," Lin Haoran said confidently.
He already controlled 19.9%. If he acquired the additional 33%, he would hold more than 50%—giving him complete control. Jardines Matheson would be powerless.
Buying at a premium to secure control of such a quality company was well worth it for Lin Haoran.
An energy company like China Gas, left to develop normally, could easily reach a valuation of HK$100–200 billion in 30 years.
Compared to Bao Yugang's acquisition of Wharf Holdings—where the share price surged from around HK$20–30 to HK$105 during the takeover battle—this 35% premium Lin Haoran was offering was minor.
"Mr. Lin, we agree!" Li Mingze said decisively, much to Lin Haoran's surprise.
For them, this was already the best outcome.
With Jardines Matheson's "Dawn Raid," their loss of control was inevitable.
Given the situation, continuing to hold shares made little sense.
Lin Haoran's offer was generous and acceptable.
They had even hoped to sell—they had simply feared Lin Haoran would drive down the price.
To find him willing to buy at the premium rate was unexpected and welcome.
Seeing them agree so quickly, Lin Haoran realized they had already made up their minds before arriving.
After all, holding shares without control was meaningless—and under Jardines Matheson's control, any chance of dividends would evaporate.
Companies like Hongkong Land and pre-acquisition Wharf were known for reinvesting profits endlessly instead of distributing dividends.
Thus, continuing to hold shares in China Gas under British control would be pointless.
"You all agree as well?" Lin Haoran asked the other three shareholders.
"If Mr. Li agrees, we naturally agree too. We've always moved as a united front in these matters," one shareholder replied with a smile.
"In that case, let's finalize this today. Please wait here while I prepare the contracts," Lin Haoran said with a smile.
"Of course," Li Mingze and the others responded politely.
They were relieved.
Although they were losing their shares, the proceeds would allow them to pursue control of other listed companies.
Moreover, they would preserve the image of China Gas as a Chinese-owned company—saving face.
Lin Haoran and Chen Shoulin left the office and headed to the legal department.
"Chairman Chen, I've decided to buy all their shares. However, I know Hong Kong Electric Group can't afford to purchase them all. I'll personally fund the rest.
Hong Kong Electric can increase its holding to about 20%, and I'll divide the remainder between Huanyu Investment Company and Wan An Group. From now on, China Gas Company will be under Hong Kong Electric's umbrella as a listed subsidiary, and you will have full authority over it," Lin Haoran said after they sat down.
Hong Kong Electric did have substantial funds, but they were earmarked for various projects, including joint developments with Hongkong Land and Wan An Group.
Thus, it wasn't feasible for Hong Kong Electric to buy all the shares.
Hearing that China Gas would become a subsidiary of Hong Kong Electric, Chen Shoulin was delighted—it would significantly boost the Group's strength.
Currently, Hong Kong Electric held 12.3% of China Gas, already a substantial stake.
"Boss, I think raising our stake to around 20% would be ideal. Too much more would strain the Group's finances," Chen Shoulin suggested.
"Alright, let's raise it to 20%. They hold around 32.9%, so Hong Kong Electric will acquire another 7.7%. The rest will be split between Huanyu Investment and Wan An Group," Lin Haoran decided.
Both Huanyu and Wan An were his private companies—it made no real difference.
With help from the Group's legal advisors, the contracts were quickly prepared.
Hong Kong Electric, Huanyu Investment, and Wan An Group each signed share transfer contracts with Li Mingze's group.
As a result, Hong Kong Electric spent another HK$61.6 million to acquire an additional 7.7%, bringing its total stake to 20%.
Huanyu Investment, previously holding 7.6%, added another 10%, reaching 17.6%.
Wan An Group acquired the remaining 15.2%.
Lin Haoran personally funded the 2 billion Hong Kong dollars needed for the Huanyu and Wan An acquisitions.
It was a large sum, but he was extremely satisfied.
China Gas was finally his.
The three companies controlled a total of 52.8% of China Gas's shares.
With a majority holding, Jardines Matheson's efforts would be utterly futile.
Moreover, because part of the holdings belonged to Hong Kong Electric Group, it wouldn't trigger any takeover obligations.
As a utility company, China Gas was subject to government oversight, and privatizing it would be extremely difficult.
Thus, by splitting the holdings, Lin Haoran neatly avoided any regulatory issues.
"Mr. Li, gentlemen, since it's late, we'll transfer the funds tomorrow. You'll receive the payments by tomorrow afternoon at the latest," Lin Haoran said with a smile after signing the contracts.
"That's no problem, Mr. Lin. We're very satisfied with this deal. We look forward to working with you more in the future," Li Mingze said cheerfully.
"Of course. I also look forward to more opportunities. You are all seasoned veterans—I still have much to learn," Lin Haoran replied modestly.
This deal not only completed the acquisition but also strengthened his personal network.
Soon, Li Xiaohu would pass away, and Lin Haoran would need Li Mingze's help to acquire TVB shares.
As the head of the Li family, Li Mingze held considerable influence—critical for Lin Haoran's future plans.
In his previous life, Run Run Shaw had taken over TVB because Li Xiaohu's children were unwilling to manage it.
Otherwise, had the Li family wanted to keep TVB, Shaw would never have had the chance.
(This chapter ends.)
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