The next day, Barron took the Hester sisters and flew from Yanjing to the Magic City.
It was precisely because I came to China this time to live with the Hearst sisters that I declined Wang Zhongjun's "good intentions" last night.
The reason why he arrived in Shanghai today was not only because he had basically dealt with things in Yanjing, but also because Baron hoped to talk to Mr. Ma about Alibaba as soon as possible.
"Your Highness, this is the report on the listing of Bank of Communications sent to you by Ms. Zeng from Standard Chartered Bank."
"OK."
After taking the folder handed over by Wang Wanting, Barron began to look through it.
Since Standard Chartered Bank completed its investment in China Construction Bank last year, the other party has started the IPO process.
At the very beginning, Bank of Communications planned to conduct an IPO on both the Hong Kong Stock Exchange and the Shanghai Stock Exchange.
However, due to the weakness of the mainland A-share market in recent times, after careful consideration, the company finally abandoned the A+H issuance plan and instead listed H shares alone in Hong Kong.
This will also be the first mainland bank to be listed in HK, and it is attracting much attention.
In this IPO of Bank of Communications, since a total of 5.856 billion H shares will be issued in HK, accounting for 13% of the total share capital after issuance, Standard Chartered Bank will also participate in the subscription of new shares. According to the previous investment agreement, after Standard Chartered Bank invests in Bank of Communications, it has anti-dilution rights and can subscribe for corresponding shares when new shares are issued to keep its shareholding ratio within 19.9%.
It can be said that Barron attaches great importance to the development of Standard Chartered Bank in Asia, especially in Greater China.
For this reason, after arriving in China, he specifically asked Zeng Jingxuan, President of Standard Chartered Bank's Greater China Region, to pass the information to him.
In addition to investing in Bank of Communications, last year Standard Chartered Bank also invested in the newly established China Bohai Bank, holding a 19.99% stake in it.
However, at the same time, Barron also rejected Standard Chartered Bank's proposal to acquire South Korea First Bank in an attempt to enter the South Korean market.
The reason for this is that in Barron's previous life, Standard Chartered Bank did complete this acquisition...
In Barron's previous life, in early 2005, Standard Chartered Bank reached an agreement to acquire all the shares of South Korea First Bank, paying approximately 3.4 trillion won in cash (US$3.3 billion) to complete the acquisition of the bank.
The First Bank of South Korea was once one of the five largest commercial banks in South Korea, with its head office in Seoul.
At the time of the acquisition, Korea First Bank had total assets of approximately US$44 billion and a total of 394 branches across the country.
In fact, Standard Chartered Bank was acquired from American Capital at that time.
In 1999, NewBridge Capital acquired a 48.56% stake in Korea First Bank, which ran into trouble after the Asian financial crisis.
In the following five years, Newbridge Capital helped Korea First Bank turn losses into profits and double its total assets to more than US$40 billion. It finally successfully sold it to Standard Chartered Bank for US$3.3 billion.
It can be said that this merger is a miracle in the history of capital mergers and acquisitions, but this is for Newbridge Capital. For Standard Chartered Bank, the price of 3.3 billion US dollars to acquire South Korea First Bank is relatively high... This price is equivalent to 1.87 times the book value of South Korea First Bank in September last year!
Especially after Standard Chartered Bank acquired South Korea First Bank and renamed it Standard Chartered South Korea First Bank, its development was not smooth.
Initially, their idea was good. After all, the size of South Korea's banking industry was twice that of Hong Kong at the time. This acquisition would help accelerate Standard Chartered Bank's development in the local area, which would bring value-added opportunities to shareholders.
They believe that after the completion of the acquisition, in terms of assets, Korea First Bank's assets will account for 22% of the group's total assets, and Standard Chartered Bank's revenue will increase by 16%. South Korea will become Standard Chartered's second largest market, second only to Hong Kong.
But the fact is that after completing this acquisition, their progress in South Korea was not smooth, especially in attracting lenders, where they encountered difficulties and their development was not as expected.
In order to optimize the incentive system of the First Bank of Korea, they were reforming the performance-based salary system, which was strongly opposed by local employees and triggered a strike that lasted for more than a month...
Finally, in 2005, the total assets managed by Korea First Bank had reached 44 billion US dollars, but fifteen years later, the total assets they managed were just over 60 billion US dollars, and the increase was not much. It can be said that the effect of this acquisition is not satisfactory.
Especially in Barron's view, it is not cost-effective to use the 3.3 billion US dollars to acquire the First Bank of South Korea. It is better to invest the funds in the reform of Huaxia Bank and use them to invest in the shares of those banks...
Moreover, it is not easy for the current Standard Chartered Bank to come up with such a large sum of money. In the original time and space, Standard Chartered Bank completed the acquisition with funds raised through rights issue. Now that he knew the future situation of this acquisition, Baron did not hesitate to reject the Standard Chartered Bank management's acquisition proposal for South Korea First Bank, and instead asked them to use more funds to participate in the reform of Hua Xia Bank.
You know, taking their previous investment as an example, at that time, they nominally invested US$1.747 billion and acquired 7.775 billion shares, with a shareholding ratio of 19.9%.
This time, Bank of Communications went public in Hong Kong. Based on the issue price of HK$2.5, the shares of Bank of Communications held by Standard Chartered Bank were worth nearly HK$19.5 billion, equivalent to US$2.5 billion, which was already a considerable profit...
Moreover, Standard Chartered Bank did not invest so much in this investment. The actual investment was far less than 1.747 billion US dollars. Many of the investments were offset by their resources and services...
Moreover, with the development of China's economy, the value of these Bank of Communications stocks will also allow them to obtain rich returns in the future, which is far more cost-effective than spending so much money to buy the South Korea First Bank, which is currently ranked seventh in South Korea.
Even if we really need to enter the South Korean market, there will be a better opportunity when the subprime mortgage crisis comes in the future...
So after Standard Chartered Bank gave up its bid for Korea First Bank, the bank eventually fell into the hands of their competitor, HSBC.
In response, Barron could only silently praise, "Well done."
"Your Highness, Mr. Ma is here."
Hangzhou is not far from Shanghai, so not long after Barron arrived here, Alibaba's boss Ma got the news and came to Yan's Garden at No. 699 Yuyuan Road... uh, now it has been renamed Cavendish Garden.