Chapter 11: Med-Ferry Acquisition (Part 2)

Chapter 11: The Med-Ferry Acquisition (Part 2)

As Jing Hong expected, the Med-Ferry acquisition wasn't going smoothly, just as he'd figured.

Fanhai and Qinghui had revised their tender offers several times, each bumping up their offer. Then, just as Med-Ferry's board was gradually leaning toward the Fanhai Group, Qinghui suddenly jacked up their bid by 12.5%.

Med-Ferry was blindsided.

Originally, because Fanhai had promised "no split-up" and "no restructuring" while Qinghui had refused, the scales had been tipping toward Fanhai. But now, the scales slammed down hard on Qinghui's side—all the way to the floor.

Med-Ferry's founders and shareholders liked "no split-up" and "no restructuring," but they liked money even more. With Qinghui raising the total consideration by 12.5%, they stood to rake in a ton of extra cash.

"What's going on?" In his office, Jing Hong frowned and asked, "This price? Have they lost their damn minds?" Sure, acquisitions with insane premiums happen all the time, but Med-Ferry was clearly not worth it.

What's the point of "winning" like this?

Their margins were pretty much the same. If they dumped too much cash here, they'd get outgunned elsewhere. Qinghui's money didn't just fall from the sky.

Zhao Hanqing was sitting at an angle, looking at Jing Hong, and heaved a long sigh: "Qinghui's only buying 90% of the shares now, and Antai Fund is picking up the other 10%. Qinghui put together a consortium."

Jing Hong did the mental math and said, "Still doesn't add up."

"They can also avoid taxes," Zhao Hanqing explained. "Sweden's real estate transaction tax law says if you buy more than 95% of a company that owns property, you've gotta pay a real estate transfer tax of 3.5% to 4.5% of the total property value. Med-Ferry is a large company with office buildings, factories, warehouses... Just the property tax alone would be close to 80 million euros. With Antai Fund stepping in, they save that 80 million."

Jing Hong blinked and asked, "Is that so?"

Even Jing Hong couldn't possibly know every obscure law in every corner of the world.

Zhao Hanqing nodded, saying nothing.

They sat in silence for a beat, then Zhao Hanqing said, "At this price, I'd say we walk away. It's not worth it. I just put together a list of other acquisition targets. Or... does Fanhai have an 'Antai Fund' type of partner willing to play bridesmaid?"

Jing Hong stayed quiet.

No, they didn't.

Funds are all in it to make money. Med-Ferry hadn't been doing well lately—actually, it'd been in decline. Fanhai and Qinghui were buying it purely for strategic reasons, to push their own products down the line. Moreover, because Fanhai and Qinghui were duking it out, the current total price was clearly way above what Med-Ferry was actually worth.

Zhao Hanqing was right—Antai Fund's few hundred million euros were purely to help Qinghui Group, playing bridesmaid for them.

Fanhai doesn't beg anyone.

Jing Hong cursed, knowing full well: "Antai's gotta be out of their minds."

"Um," Zhao Hanqing said cautiously, "Antai Fund has always been in bed with the Qinghui Group. They'd never pulled this move before, since it means Antai's own few hundred million euros are on the line. But it's not surprising. Word is, back when Antai Fund was about to go under, Zhou Buqun bailed them out—so they owe him big time."

"..." Jing Hong looked up at Zhao Hanqing and said with a smile that didn't reach his eyes, "I know."

He just wanted to vent, not get talked back to.

"..." Zhao Hanqing didn't dare say another word.

Jing Hong thought: Jing Haiping, Jing Haiping, you're always calling Zhou Buqun the bad guy and yourself the good guy. Look—the bad guy's got ride-or-die friends, but you, Mr. Good Guy, have nobody.

"This is actually a message," Jing Hong said, bringing his thoughts back and dropping the topic of Zhou Buqun. "Qinghui could actually scrape together those few hundred million euros on their own. They just want to show us they've got allies. They want to tell us that in a price war, Fanhai has no edge. Qinghui wants us to back off on our own and stop bidding up. Otherwise, Fanhai still loses, Qinghui bleeds out, and the only winner is Med-Ferry. We're both Chinese companies—don't let foreigners take our money and laugh at us."

Zhao Hanqing read the room: "So—"

"Let's hold off for now," Jing Hong instructed. "Let me think it over."

"Alright," Zhao Hanqing said, handing him the list of other acquisition targets. "You should take a look at these too—other targets. Qinghui wants a company with orthopedic implants because they're trying to push Weikang Medical to an IPO, but that's not our play. Other options are fine too. When it comes to 'resources,' Med-Ferry actually has alternatives."

"Mm." Jing Hong casually flipped through the list in his hand while telling Zhao Hanqing, "But I still want Med-Ferry. I want that AI drug R&D company that Med-Ferry owns. I didn't say it before, but I really want it."

Zhao Hanqing looked puzzled for a second, a flicker of confusion in his eyes.

"Alright," Jing Hong waved Zhao Hanqing off, "I'll think it over."

Zhao Hanqing nodded: "Understood."

...

Back home that night, after stripping down and showering, Jing Hong lay on the bed in his bedroom.

He hated pajamas, preferred sleeping in just his boxers. Apparently that meant you had a strong sex drive, or so he'd heard—he didn't really know.

He'd planned to lean back against the headboard and read, but his cousin called him on audio.

Jing Hong was close with his cousin and her parents—when he was a kid, Jing Haiping and Jiang Mei were so busy building their business they were never home, and he spent part of his childhood at their place.

As Jing Hong got more and more successful, he never forgot to check in with his cousin's family during the holidays, and he was always super patient when they called.

"Brother, brother," his cousin Jing Yu said, "I've got some tea! I saw online today that the 'crown prince' of XX Group has an amazing eye for investments? He's backed a bunch of public companies? A hundred percent hit rate? So many things we use now have this 'prince's' money in them? Is it true? A lot of people say he's on par with the Fanhai guy and the Qinghui guy—the third seriously impressive second-gen entrepreneur. Is that real?"

"Let me check his investments first." Jing Hong propped himself up on one elbow, earbuds in, swiping through his iPad while he answered. "Fake. He only invested in Series E and F rounds, plus a bunch of pre-IPO deals—all hot companies every VC was fighting over. Take the two or three with the highest returns—he got in at pre-IPO. Everyone knew those companies were about to list." Jing Hong's tone was lazy. "This kind of hot investment isn't about vision—it's about connections. His connection is his dad."

His cousin wasn't disappointed—she sounded like she'd just gotten a juicy scoop: "Oh—!!!"

Jing Hong himself, back in the day, had seriously put his own money into some angel rounds. Some of those companies made it, some didn't, but overall, at the "angel round" level, his hit rate and returns were pretty impressive.

On the other end, his cousin said, "So this 'number three' is all hype."

Jing Hong said offhandedly, "I haven't seen anything special so far. His dad's probably trying to build his rep. That's normal." These days, "manufacturing gods" usually works.

But his cousin's comment—"this 'number three' is all hype"—suddenly made Jing Hong realize that years had gone by, and the only second-gen entrepreneurs who actually lived up to the hype were still just him and Zhou Chang. Zhou Chang had also made some killer angel investments.

He had to admit, he and Zhou Chang had saved their dads a ton of trouble. Word was, other "first-gen entrepreneurs" were already stressing about passing on their wealth, because when it came to "inheriting shares," family interests and company interests often clashed hard.

Jing Hong thought: Most of those "first-gen" companies were probably gonna plateau anyway.

Actually, compared to the giant companies the older generation built, Jing Hong thought the unicorns from the new generation were way more threatening. A ton of highly educated, capable people were eyeing the giants, waiting for their shot to take over.

Just as he was thinking about that, his cousin brought up Zhou Chang: "Oh right, bro, the other day I also got a taste of that tea about Zhou Chang's 'boardroom bloodbath' back then. It was exposed by finance reporters and screenshotted by netizens."

Because he'd been thinking about Zhou Chang, hearing the name suddenly made Jing Hong feel a pang of guilt—like he'd been caught red-handed—so he asked, "Huh? How'd he 'slaughter the board'?"

"Well," his cousin recalled, "apparently because Zhou Chang took over Qinghui pretty suddenly, some of the old-timers on the board didn't accept him."

Jing Hong had also just taken over the reins back then and hadn't really paid attention to Qinghui or Zhou Chang, so he didn't know about any of that infighting. But now he was a little curious and asked, "And then?"

"Huh?" His cousin was surprised. "Bro, you actually wanna hear gossip? You never ask me follow-ups! But today you've asked twice!"

"Not really," Jing Hong said, not about to let a young girl catch him slipping, and joked, "Think of it as a bedtime story—just something to listen to."

"Fine," his cousin went on. "But I don't really remember much... Anyway, everyone who tried to take him on got taken out. Oh wait, I remember one thing. Zhou Chang was gonna sue a shareholder over related-party loan issues with Qinghui's payment business... Zhou Chang was a shareholder too, so of course he could sue. And then, to get Zhou Chang to back off, that shareholder had to agree to vote with him at the shareholders' meeting to kick a director off the board. Later, Zhou Chang just drafted a list of 15 directors, picking his own independent directors, basically saying, 'This is the board list, period!'"

Jing Hong listened, getting more interested: "I see."

In fact, Jing Hong didn't believe for a second that Zhou Chang would actually run into any real trouble.

Qinghui, like Fanhai, is also listed in the U.S. When it went public years ago, it adopted a dual-class share structure with "unequal voting rights," very similar to Fanhai's—A shares are ordinary shares with one vote per share, while B shares carry super voting rights with ten votes per share.

Jing Haiping, Jiang Mei, and Jing Hong hold only 8.8% of Fanhai Group's shares but control 49.1% of the voting power. Jing Hong knew that the Zhou family's stake was slightly smaller than his own, but it should still be above 40%. Given that, with Zhou Chang's ability and tactics, controlling the board was a piece of cake. It was that director who misread the room, thinking he could play the regent.

But then Jing Hong thought about himself and realized he'd also been on high alert when he first took over. Unlike Zhou Chang, who ruled with an iron fist, he'd taken a gentler approach—before every board meeting in the early days, Jing Hong would call each director of Fanhai, ask their opinions on the various agenda items, and then lay out his own thoughts, making sure nothing spiraled out of control during the meetings. He'd always had a silver tongue, and when opinions clashed, he could usually win the other person over beforehand. In the end, Fanhai's transition had been relatively smooth.

Just then, his cousin remembered the second half and kept going. After hearing it all, Jing Hong could only say, "This is what they call 'cleaning house at the board'... The rumors are way overblown. Zhou Chang didn't even break a sweat." The highlight was the first part.

As he spoke, Jing Hong also took a jab at Jing Haiping: He's always saying I'm too ruthless—was that really ruthless? Look at this guy, "cleaning house at the board," tsk tsk.

"Alright, alright..." Sensing Jing Hong didn't find the story exciting or entertaining enough, his cousin said, "So, does it pass as a bedtime story?"

Jing Hong continued teasing his cousin: "No. Your storytelling's too vivid—full of ups and downs, dramatic and animated, and your pitch is too high. Whose bedtime story keeps you up the more you listen?"

His cousin's voice was actually quite pleasant, like a carefree lark, but when she got too excited telling something, it became a bit shrill.

"Hmph," his cousin asked, "Then whose voice would be suitable for reading bedtime stories?"

"..." For a moment, Jing Hong couldn't think of anyone.

Out of nowhere, he thought of Zhou Chang himself.

A steady, deep voice, thick and rich, with a magnetic quality—if he softly told stories about his past, it'd probably make a great bedtime listen.

"Cousin?"

"Hmm?" Jing Hong snapped back to reality and smiled. "Sometimes letting your mind wander is pretty stress-relieving."

Author's note:

To sum it up in one sentence: The lead raised his price and won out on the deal. He only bought 90% himself and asked his buddies to buy the remaining 10%, which saved him a hefty tax bill.