MTL - America’s Road To Fame-Chapter 29 Garred's plan

"William, I think we should have a good talk. You should know that we at Kushner Group have completed the acquisition of the remaining 40% of Building 666. So now we are collaborators, and the rental business of the building is not ideal, so For the common good, we need to cooperate."

After completing the pleasant study, William Chen received a call from Gared just after sending Erica off. He hoped to make an appointment with him to have a good talk.

William Chen wanted to see what Garred had in mind, so he told the other party that he had plans later. If he needed to talk, he could give Gared half an hour. In this matter, Chen William did not perfunctory the other party, he did have something to do after a while.

Tom made an appointment with William Chen for an interview on "The Oprah Show" a few days ago. In this episode of the show, Oprah will bring his team to New York to have a talk with William Chen. Scheduled for later this afternoon.

Gared happily agreed. He was in Building 666 at this time, so he soon came to William Chen's office.

After the two of them greeted, they sat down opposite William Chen, and Jared said, "William, this is already a fact. Our Kushner Group has completed the acquisition of 40% of the shares in Building 666. Therefore, I will now formally propose to you to acquire you. An offer for a 60% stake in hand. We at Kushner Group will still be buying at an overall valuation of the building at $2 billion. After completing this acquisition, you can immediately get $1.2 billion in cash.”

"Sorry, Gared, I've already answered you once about this. Even now, my answer has not changed - Building 666 is not for sale. But I welcome you to join us and we can work together ."

It's not that William Chen is not impressed by Garride's offer. By selling 60% of the 666 Building, he can immediately have $1.2 billion in cash. After repaying the bank's loan, he can still have nearly half of it left. . With this money, no matter what he invests, the return he receives will be much higher than if he continues to hold shares in Building 666.

Especially when the subprime mortgage crisis is about to break out. Once the subprime mortgage crisis breaks out, the real estate market in the United States is about to collapse, and at that time, the prices of buildings will also drop a lot. If he sells his 60% stake now. Then maybe in a year or two, when the house price drops to the lowest point, you can buy the building back with only two-thirds of the price, or even cut it in half, and you can earn a difference of hundreds of millions of dollars. Isn't that delicious? ?

But a problem that needs to be considered is that all acquisitions are not simple things. Even if you can come up with enough money, whether the other party is willing to sell is another question. Just like now, Gared can come up with strong capital to make acquisitions, but as long as William Chen insists not to sell, he has nothing to do.

Therefore, when acquiring assets, you often still need some starting points. Either it is a good time at the right time and place, or you already have enough influential shares in your hand. Those acquisitions that do not have these factors and are forcibly promoted often require more effort, even The end result was that the acquisition failed.

And as Kushner Group, which has been in the real estate industry for so many years, doesn't it know that as long as it survives the economic crisis for a few years, the real estate industry will recover sooner or later?

If they insist on doing this, and William Chen does not have any shares in the building as a trigger for intervention, then he may never be able to get the building back, unless he gives a very attractive price, then at least he will be dealt with by them. The purchase price was higher.

William Chen needs to take into account, after all, that Gared's family company, the Kushner Group, controls billions of dollars in assets.

Even if he asks the other party to add a repurchase priority clause similar to his previous repurchase agreement with the Andal Trust Fund in the contract, as long as their family decides to protect the project during the downturn of the real estate during the crisis, he will not sell it. Method. And after the crisis passed, the price of real estate rose again, and he couldn't find it cheap at all.

Just like when William Chen was in his previous life, although Gared bought Building 666, it brought him great fame. But at that time, the timing of his acquisition was also not good. After buying Building 666, he encountered the subprime mortgage crisis.

He survived the crisis by selling a 49.9% stake in the building, and did not sell the building. It can also be seen that even in such difficult times, they still will not give up the holding qualification of the building, and try to repurchase those shares after the crisis. It is not so easy to get back more than 50% of the controlling stake.

By analogy, Chen William also has a plan to use the opportunity to buy other assets during the upcoming subprime mortgage crisis. Therefore, in the plan, he also needs to try his best to be able to penetrate into those target companies before that, and hold a part of the shares in his hands first, as a starting point. We can see this situation in many acquisitions in reality. Many acquisitions are not completed at one time, but first become one of the shareholders by buying shares, and then gradually increase the shares they hold, and finally complete the acquisition. .

At the same time, although the shares of Building 666 he currently holds are his own assets, when dealing with these assets, he cannot ignore the feelings of Tom and the Drey family. After all, he is not the prodigal prodigy of his predecessor, and he is still grateful for Tom and John Del Rey's concern and help to him. He knew that in Tom's heart, the most important thing was the assets left to him by his parents, including his real estate, and in addition, Building 666.

When the predecessor was selling the shares of the building, the situation was helpless at that time. After all, there was such a large loan that needed to be repaid.

But now Tom and the others clearly know that they have plenty of funds. If they still sell the shares of the building, it will be too emotional. After all, William Chen couldn't explain to them that the subprime mortgage crisis was about to break out, and he couldn't guarantee that the building would be 100% repurchased by that time.

Therefore, compared with the difference of hundreds of millions of dollars that may be earned, Chen William finally gave up the slightly risky choice.

Gared had already anticipated William Chen's rejection again. He also doesn't put all his hopes on this takeover offer. After William Chen replied, Gared said:

"William, I hope you will think about it again, my request for acquisition will be valid for a long time. Besides, as one of the major shareholders of Building 666, I have another proposal to be proposed. That is I'd like to be able to do a complete rebuild of Building 666. We've done an estimate that if the building were to be raised and renovated to 1,400 feet, it would cost about $3 billion. I've heard of similar plans, once That's what your father wished to do while he was alive."

"Gared, your investigation is very clear. Indeed, after my father acquired this building, he had a similar renovation plan, but it was shelved due to changes. Now I am more interested in your proposal. The question is, how do you want to do it? I don't believe you would be kind enough to lend such a sum of money to the building for renovation."

Hearing Gared's proposal, William Chen realized that the meat scene was coming, which should be the biggest purpose of his coming here today.

"Our current plan is for Kushner Group to invest 3 billion US dollars to promote the renovation plan of Building 666 in the form of capital contribution." Sure enough, Gared said the key point of this plan.

"Good way, if according to your plan, Kushner Group will become the largest shareholder of Building 666 after investing 3 billion US dollars. Your next step will not be to change the name of this building to Kushner Building."

William Chen said with a half-smile. According to Gared’s plan, based on the current overall valuation of the 666 building of 2 billion US dollars, after the investment of 3 billion US dollars, the shares held by Kushner Group will increase from 40% to 76%, thus fully controlling the building. . The share of the building in Chen William's hands will be reduced from 60% to 24%. Although he can still have a certain right to speak, he has become a minority shareholder.

"I really don't want you to always look at our Kushner Group with this kind of malice, William, and frankly, part of the purpose of this plan is to give the Kushner Group a controlling stake in the building, but in the end, this plan can be implemented, right It's good for both of us.

I hope we can cast aside prejudice and have a good cooperation, William, you must know that 3 billion US dollars is not a small amount of money, even our Kushner Group is very difficult to make such a big gamble. UU reading www. uukanshu. com

Therefore, the completion of the holding is also to convince the other shareholders of the group, so that the interests of the Kushner Group are deeply bound to the 666 Building. Although the Kushner Group is controlled by our family, we are not saying that we can decide anything, and the opinions of other shareholders need to be respected. "

"And don't just see that your stake has decreased, William. In fact, after our capital injection, your wealth has not changed, just a little less of a false name. But you can't deny that our Kushner Group is after all in We have been immersed in the real estate industry for many years and have more experience in the real estate industry. Therefore, we will hand over Building No. 666 to us to operate. There will never be a situation where the vacancy rate of the building is extremely high during the current real estate boom.

And after the renovation of the building, through our operation, the value of the stock in your hands will definitely be much higher than before, not to mention the current $1.2 billion, it is very likely that the appreciation will be $2 billion. We are very sincere and hope that you will consider this plan carefully. "

I have to say what Gared said does sound reasonable. But he just missed two points. The first is that even the Kushner Group cannot be said to have taken out 3 billion US dollars of funds all at once, so it is easy to guess that these funds are definitely mainly derived from their loans to banks. , and maybe even their own shares in Building 666 and future shares will be collateral.

What the bank likes to do most is to add icing on the cake. Therefore, now that the Kushner Group is developing very well, it can get more support from the bank. If it is Chen William, it is absolutely impossible to have this kind of treatment.