Video Game Empire - Chapter 657

“Mr. Li, on behalf of the board of directors of Cathay Pacific Airways, I sincerely extend a goodwill bid to China Civil Aviation. Hong Kong’s local market is small, with a population of only 7 million, so it is difficult to accommodate two airlines at the same time.

Instead of Huamin and Cathay Pacific losing both sides because of vicious competition, it is better to merge the two sides and find a balance of interests that everyone can accept, so as to achieve a win-win situation for everyone!

Here I can make a promise on behalf of Cathay Pacific that after the merger of Huamin and Cathay Pacific, not only will they continue to retain the right to operate independently, but we will also assist them in the integration of Dragonair.

For example, among the routes between Hong Kong and all mainland Chinese cities, the most profitable routes are undoubtedly Hong Kong-Beijing and Hong Kong-Shanghai. We can assign these two routes from Cathay Pacific to Dragonair. In the future, Dragonair can focus on the aviation market from Hong Kong to mainland China, thus forming a differentiated operation with Cathay Pacific! “

While Li Xuan was looking at the proposal for Cathay Pacific’s comprehensive acquisition of Huamin, which he brought over, Adrian Shihuaiah sat on the other sofa next to him and briefly introduced Cathay Pacific Group’s purpose.

“Hehe, the so-called win-win plan of Cathay Pacific’s board of directors is that you buy Huamin with cash? Adrian, do you think I need cash urgently now? If it weren’t for Huamin’s orders from Boeing and Airbus, it would take 15 orders at the earliest. It takes months to deliver the new plane, otherwise I wouldn’t want them to lease the old plane!” Li Xuan gently threw the takeover offer that Shi Huaiya brought over on the coffee table, shook his head and said.

In order to reduce operating costs, cargo airlines typically have a much higher percentage of older aircraft in their fleets than passenger airlines. This directly leads to a series of problems such as more frequent logistical maintenance and an increase in the potential accident rate.

Because of the secret support of Li Xuan, Huamin Airlines has been placing orders with Boeing and Airbus, two aircraft manufacturers, since its establishment. However, because these two oligopolistic companies monopolize the production of most of the world’s large civil aviation aircraft, the airlines of various countries often have a backlog of orders. It is not that they can mention the spot if they have money, but a long waiting period.

Therefore, under the circumstance that the new aircraft cannot be put in place quickly, and the cargo aviation market is growing rapidly, the best solution adopted by Huamin Airlines at present is to temporarily lease some old aircraft for emergencies!

Li Xuan’s words made Shi Huaiya frown involuntarily. He had already guessed that his trip would not be smooth, but he didn’t expect to encounter a major setback at the beginning. Before he flew to Beijing-Beijing, Cathay Pacific’s board of directors had a long and intense discussion, and finally gave an offer to buy Huamin Airlines as a whole with 5 billion Hong Kong dollars in cash.

In large-scale corporate mergers and acquisitions, cash acquisition is usually the easiest solution to be accepted by the shareholders of the acquiree! As long as the money is given in place and happy, it is only a matter of course that the acquisition is successful!

For example, in the acquisition of Dragonair by Huamin Airlines not long ago, Bao and Hong Kong and Macau were very happy to withdraw with cash checks. Only Cao Guangbiao was firmly optimistic about the future development prospects of Dragonair, and chose to take this part of the shares of Dragonair that he held. It was replaced by a shareholding in Huamin Airlines, the parent company after the merger.

And this involves the issue of the actual valuation of both parties. According to the M&A financial data obtained by Shi Huai Ya with a lot of effort, the final valuation of Dragonair is 450 million, and the valuation of Huamin Airlines is 3.5 billion Hong Kong dollars. .

That is to say, with the two major shareholders of the original Dragonair cashing out, the actual valuation after the merger of Huamin and Dragonair should be around HK$3.6 billion. And Thai Airways has now directly raised the offer to 5 billion Hong Kong dollars in cash, which is already very sincere.

It is a pity that this plan is obviously not favored by the largest shareholder of Huamin Airlines, the God of Fortune Li. Li Xuan made it very clear that he was not short of money. Originally, even Huamin’s fleet wanted to use all new planes.

“If Cathay Pacific really wants to acquire Huamin, if other conditions remain unchanged, if the cash acquisition can be replaced by an equity swap, I can ask Huamin’s management to talk to you!” Li Xuan suddenly said again. After mentioning her own plan, Shi Huaiya heard Li Xuan’s thoughts, and she couldn’t hold back the last trace of a calm smile on her face, and her expression became very serious.

In large-scale corporate mergers and acquisitions, the acquiree most wants cash acquisition, and the acquirer usually prefers to complete the annexation by means of equity exchange. Because the huge cash outlay for the acquirer will directly cause the company’s debt to soar, which will lead to a series of follow-up troubles.

For the acquiree, it is undoubtedly the safest way to go directly to safety. If it is replaced by the stock of the new company, who knows if the stock price will plummet to only a fraction of the original after the lock-up period ends.

But now the dispute between Huamin and Cathay Pacific on this issue is just reversed. The cash acquisition meant that Li Xuan directly took the money out of the game. He originally joined Huamin in order to build it into a part of the logistics system of the Oriental Group. The reason why he was willing to take over Hong Kong Dragon was not because he wanted to attack Cathay Pacific of the Shi Huai Ya family. But because he is more optimistic about the development of the domestic economy in the next two decades than anyone else.

In Li Xuan’s view, the most valuable thing about Dragonair is actually the dozen or so routes from Hong Kong to the mainland that they have applied for in recent years. In the eyes of Cathay Pacific’s board of directors, except for the Hong Kong-Beijing and Hong Kong-Shanghai routes, other routes to the mainland are tasteless, and this has not hindered the application of Hong Kong Dragon’s routes. It is a pity that the strength and durability of China’s economic growth in the future will far exceed the world’s expectations.

This has even directly changed the global economic and political landscape, and for Hong Kong’s aviation industry, the next flood of mainland passengers will flood the Hong Kong airport. Cao Guangbiao has been trying to persuade Li Xuan to fight against the aviation bill passed by the Hong Kong and British authorities a few years ago, but he has no idea what Li Xuan and his views are.

Li Xuan not only does not dislike the policy of “one airline for one route”~www.mtlnovel.com~, but also intends to actively maintain this policy. Because only monopoly can maximize benefits, most people hate monopoly because they have no right to monopolize others.

With the rapid development of China’s economy, exchanges between China and the world are becoming more and more frequent, and Hong Kong is the most important transit point among them. Many passengers traveling between China and the world will transit through Hong Kong. In addition to the huge source of converted tourists, Hong Kong will be one of the most important destinations for domestic people going abroad in the next two decades. Especially after the “free travel” gift package, the entire Hong Kong and Kowloon are crowded with tourists from the mainland.

If Hong Kong Dragon can squeeze Cathay Pacific out of the mainland market by taking advantage of the exclusive right to operate the route, even if it can’t overthrow Cathay Pacific, at least it will have the confidence to be on an equal footing with the other party! Therefore, Li Xuan doesn’t care about the short-term losses of Hong Kong Dragon, nor does he despise the more than one billion Hong Kong dollars given by Shi Huai Ya. He is going to put a long line to catch a big fish, and this fish is the whole Hong Kong aviation industry!

.. m.

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