Chapter 1874 Hostile Takeover?

The chairman of Lituo Group, Paul Skinner, was looking at the documents in the office. Christmas was coming soon, and all the applications submitted by the following companies needed him to approve.

Under normal circumstances, the CEO can make decisions, but who told him to still hold the position of CEO, and he is still unwilling to delegate power.

"Chairman, our stock has been going up these days."

Skinner looked up at his subordinates: "Isn't this a good thing? Our stock has fallen a lot this year, but now it's starting to recover, which is normal."

Many people have analyzed that the financial market has bottomed out, and it is time to rebound. It is normal for their company’s stock price to rebound. Is it any surprise?

"Chairman, you didn't understand, we found that someone bought a lot of our company's stock in the stock market."

Um? Someone bought a lot of shares in their Lituo company? what's going on? Could it be that someone knows that they are negotiating cooperation with the aluminum company in Huaxia, and plans to take the opportunity to make a fortune?

But this cooperation is still under negotiation, the framework has not yet been finalized, and it has not been announced to the public. There are only a few directors who know inside the company. Did these people disclose the news to others?

This is not very good. If during the formal negotiation with Huaxia, someone suddenly sells a large amount of their shares in Lituo Group, causing their stock price to drop. Then Huaxia Aluminum can get more stocks by paying the same cash. In this way, they will be at a loss.

"Do you know who it is? Which country's institution?" The directors of Lituo Group also come from different countries, including Britain, Spain, Australia, Canada, the United States, etc. If you know which country's institution is in Acquiring their stock could also help him narrow the scope of his suspicions.

"According to our investigation, it may be from the UK and Russia."

Great Britain and Russia?

Skinner was a little confused. Fortunately, Britain said that besides him, two other directors were British. But in Russia, there is no director of the company, but a vice president. Could it be that these people have united?

That's right, when BHP Billiton wanted to acquire Lituo last year, those people agreed. After the news of the acquisition broke out, those people also cashed out a lot of company stocks.

Now that the company's stock price has fallen sharply, they buy it again, wait for it to rise and then sell it, and they can make a fortune again, that's for sure.

"Go and inform us that a board meeting will be held tomorrow to discuss the year-end matters."

Skinner turned on the computer and saw that the company's stock price was still going up. Today it was up another two percent.

If there is major good news, it is normal for the company's stock price to rise by 10%. However, the company's turnover and profits are decreasing this year, and there is no good news. How could the stock price have risen so sharply, and it has continued to rise for several days?

Although Lituo is not as good as Vale and BHP in iron ore, it is already the world's number one in aluminum and the world's leader in copper. Why should it be acquired by BHP?

The company is still making money, and there is no loss, so why must it be sold? Even if it is sold, it will definitely not be sold to an ambitious person like BHP!

When BHP Billiton wanted to acquire Lituo Group last year, it did not say hello in advance, but directly began to buy a large number of Lituo Group's shares in the stock market, and the three markets purchased at the same time.

This method of forced acquisition without the permission of Lituo's board of directors is called hostile takeover or hostile takeover in the industry.

In fact, as the CEO of the company, he does not object to the hostile takeover of the other party. Because if you want to complete a hostile takeover, you have to buy their company’s stock at a premium in the stock market. If the stock price rises, all shareholders will benefit. The CEO’s task is to make all shareholders profit. This is not in conflict.

But as the chairman of the company, he couldn't agree to this. Once the other party acquires a sufficient amount, the other party's equity will increase,

How can he secure his position as the chairman?

And after the hostile takeover, even if they agree to convert Lituo Group's shares into BHP shares, but the other party buys them at a premium, the company's share price will soon fall back.

Small shareholders sold their stocks and left with the money. Major shareholders like him usually get stocks, and they cannot sell them for a short time. They can only watch the stocks fall. His assets expand and then shrink. Can you feel better?

If you really want to buy, you can, don't use any stocks to pay, just take cash. If you give cash, you don't need to pay a premium of more than 50%, but if you pay a premium of 20%, I will gladly agree.

After a general company is acquired, the management will also be restructured, and the business will also be reorganized. His position as the chairman of the board will definitely be gone.

If he is lucky, he can become a director or CEO, but if he is unlucky, he can only be an idle shareholder. How can he accept the sudden disappearance of power?

What's more, from a long-term perspective, BHP's acquisition method is simply a chicken and an egg. Because BHP plans to use a leveraged buyout, the asking price was more than 170 billion U.S. dollars at that time, but what they actually offered was only more than 10 billion U.S. dollars.

They used the shares of Lituo that they were about to acquire as collateral, and then borrowed money from the bank, which was more unacceptable than ordinary debt acquisitions.

But fortunately, Lituo Group refused at that time, otherwise we don't know how much trouble will happen. Because of leveraged buyouts, it is inevitable to borrow from financial institutions such as banks, and then those institutions will convert these loans into bonds and issue them.

The final result is that BHP Billiton achieved more than 100 billion U.S. dollars with more than 10 billion U.S. dollars. Banks and other institutions obtained the mortgaged stocks and loan interest of Lituo Group, and then sold these debts as bonds. And find an insurance company or other banking institutions for guarantee.

Whoever buys this bond will eventually lose money. This was the financial method that Lehman Brothers Bank was best at at that time, asset securitization, and many companies went bankrupt because of this operation.

Thinking of this, Skinner's hand, which was flipping through the documents, froze.

Wait, hostile takeover.

Why is the method this time so similar to the method used by BHP to acquire Lituo Group last time?

Could it be that BHP is planning to launch a hostile takeover again? Has any shareholder of the company turned to BHP this time?

No, this matter must be investigated immediately. The last time it was done this way, Lituo's stock price finally dropped a lot. If it happens again like this, it will definitely fall even more!

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