Chapter 570 The Dust Settles

The final rejection by the Competition and Markets Authority (CMA) of the United Kingdom was like the sword of Damocles that had been hanging over this acquisition, and it finally fell.

As a result, after learning that the merger between Thomson Group and Reuters Group was hopeless, the share price of Thomson Group fell rapidly again, falling by nearly 10% on the same day!

Now, in addition to accepting this result, Thomson Group has to stabilize its share price...

But before them, a fund had already begun to enter the stock market and began to absorb the stocks that were thrown out silently.

So under such circumstances, the downward trend of Thomson Group's share price gradually eased, and there was a certain rebound. In the end, their share price returned to about US$35, and stopped the sharp fluctuations and stabilized.

This price fell by more than 25% compared to the highest share price of Thomson Group in early October.

There is no doubt that this fund that led Thomson Group to "protect the market" came from the IE Fund.

They had previously shorted Thomson Group's stock price and borrowed a large number of Thomson Group's stocks from the market. Now the operation is almost completed, and they need to buy it back from the market at a low price and return it to the brokers.

For this short-selling operation, IE Fund used a total of about $10 billion in funds. After the final inventory, the profit exceeded $200 million...

It doesn't seem to be much. The main reason is that although the entire market is roughly in a downward channel, in order to make Thomson Group's stocks fall more sharply, IE Fund often needs to play the role of a leader, selling a large number of stocks and breaking through some pressured prices. Among them, there are also "protective" funds from the Thomson family and Thomson Group. In the process of these struggles and back and forth transactions, the friction cost is also considerable.

But in any case, at least with the help of the big trend, they made a profit and successfully closed their positions, instead of being forced to short and incurring losses after Thomson Group's larger amount of funds entered the market. The result is still good.

More importantly, this short selling exercised the IE Fund team of HK. Although they had similar operations before, they had no experience in operating with such a large amount of funds.

After that, the IE Fund can use the existing more than 1.2 billion US dollars to join the short selling of the entire market.

This time, there is no specific task like short selling Thomson Group, and they need to take the role of leader, so their profits will also be improved.

…

Just after the British Competition and Markets Authority (CMA) first rejected Thomson Group's acquisition of Reuters Group, the relevant American agencies also rejected this acquisition on the next day, that is, November 1, and determined that Thomson Group's acquisition of Reuters Group would violate the relevant "anti-monopoly" regulations.

So after the merger with Thomson Group was hopeless, Reuters Group only had one choice left, that is, SEM Group.

It's not that they can't give up being acquired and continue to develop independently.

But the board of directors of Reuters Group also understands that the reason why the current share price of Reuters Group has fallen much less than that of Thomson Group after the acquisition was rejected by the antitrust agency is that although the two cannot merge, which has hit the market's previous optimism, the market still understands that Reuters Group still has SEM Group as an option.

Although being acquired by SEM Group is not as good as choosing Thomson Group in terms of synergy and overall scale in the future, it is still a wise choice - after all, the market value of SEM Group, although similar to that of Reuters Group, is far less than that of Thomson Group, but the DS Group behind it is still very powerful.

If Reuters Group rejects SEM Group again, there is no doubt that they will puncture the market's last optimism about it, causing a panic drop in Reuters Group's share price. Under the current economic situation, this is definitely not a wise choice.

You know, whether Reuters is sold to Thomson or SEM, since they have accepted the acquisition, the shareholders of the board of directors care most about how to sell their Reuters shares at the best price, rather than the future of Reuters or their "five core principles" - that is what Reuters founders consider.

The reason why they supported Thomson's acquisition plan before was that in addition to cash, the shares of the new company exchanged, they thought that the shares of the merged Thomson-Reuters Group might be more valuable.

Therefore, after Thomson's acquisition of Reuters was no longer possible, if they could get a satisfactory offer from SEM, they would not mind agreeing to the other party's acquisition.

Under such circumstances, Reuters began negotiations with SEM on the acquisition - the two sides had contact in May this year, and later after Thomson cut in, the two sides once again touched on the negotiation of a substantive acquisition plan.

And before the negotiations between Reuters and SEM this time...

On October 31, the British Treasury, the Bank of England and the Financial Services Authority of the United Kingdom finally determined the acquisition plan of the consortium composed of Standard Chartered Bank and DS Group among the acquisition plans of those institutions and consortiums that intend to acquire Northern Rock Bank, and announced the result.

This means that Standard Chartered Bank can start the acquisition process of Northern Rock Bank from now on.

According to the acquisition plan submitted by Standard Chartered Bank, they will acquire 100% of the shares of Northern Rock Bank, whose market value has fallen to less than 300 million pounds at this time, for a total price of 500 million pounds, and complete the privatization of the bank.

In addition, Standard Chartered Bank promised that their consortium will return the 25 billion pounds of loans and interest they previously injected into Northern Rock Bank to the Bank of England within one month after completing the acquisition of Northern Rock Bank.

It can be said that what allowed Standard Chartered Bank to obtain the approval of the British government in the competition with more than a dozen companies and consortiums including Virgin Group, Olivant and Paul Thompson was their promise to immediately return all 25 billion pounds and interest, which could immediately withdraw the government from the Northern Rock Bank incident and would not bring negative impact later.

As for their acquisition of all shares of Northern Rock Bank at a price of 500 million pounds to complete privatization...

In fact, the board of directors of Northern Rock Bank was somewhat dissatisfied with this price at that time - although the market value of this bank was less than 300 million pounds based on the stock price of Northern Rock Bank at this time, their board of directors believed that the current stock price of Northern Rock Bank could not reflect their actual value at this time. In fact, it was affected by the previous run and the stock price was greatly underestimated.

In particular, the Hall family, the major shareholder of Northern Rock Bank, once expressed dissatisfaction with this.

But there is no way. The British government is very tough on this. Chancellor of the Exchequer Darling once directly declared to the board of directors of Northern Rock Bank:

"You only have two choices, one is to accept the acquisition, and the other is to nationalize the bank. Unless you can immediately return the country's 25 billion loans and interest, we will not allow the bank owners who have endangered the entire national financial order to escape punishment after receiving assistance. The investigation of this incident is still not over!"

His meaning is very clear. The board of directors of Northern Rock Bank will definitely not be able to return the 25 billion pounds of loans and interest. So whether it is acquired or the bank is nationalized, their ending is the same.

On the contrary, if they are acquired, they can get some money back. If the bank is nationalized, the government will strictly supervise it. The 25 billion pounds of debt will be converted into bank shares. I believe they will not get much advantage from it. Instead, the original shares will be diluted to almost no sense of existence, becoming "marginal people"...

To put it bluntly, you messed up the matter and need us to help you with money. If it still affects the "normalization" of Northern Rock Bank, then don't think that we will not hold Northern Rock Bank accountable for its previous operational problems. Our investigation is not over yet. Do you think we dare not arrest a few people?

Faced with such a situation, what else can the shareholders do?

At least Standard Chartered Bank is willing to spend 500 million pounds to acquire their shares...