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The old man finally understood how Hardy had succeeded. His previously polite and peaceful demeanor had been an illusion; beneath the surface was a ruthlessness that rivaled the most hardened capitalists.
Yet Giannini knew that such qualities were often essential for success in this cutthroat society.
"The acquisition of Wells Fargo is a major undertaking," Giannini said. "Wells Fargo has over $200 million in assets. This is not a small deal."
"The Fargo family, the founders of Wells Fargo, hold 17% of the shares. It's not easy for them to part with their stake, and there are dozens of other shareholders," he added.
Hardy smiled. "If Bank of America intervenes, it shouldn't be too difficult. If cash is needed, you can offer them cash. If they prefer, I'm open to exchanging shares from other industries, like the Hardy Hotel."
Giannini's eyes brightened. "You're proposing a swap?"
"Yes, but the price will need to be negotiated. The profitability of the Hardy Hotel is well-known. If it were listed now, what do you think its market value would be?" Hardy asked.
Giannini knew that negotiating with Hardy would not be straightforward. The banker valued the shares Hardy held, but he had not reached the point of willingly investing hundreds of millions without a significant return.
After a moment of thought, Giannini said, "I will spend $60 million to acquire 30% of Hardy Hotel."
This valuation equated to $200 million for Hardy Casino.
"At the same time, I will help you complete the acquisition of Wells Fargo. Any shortfall in funds will be covered by Bank of America."
Giannini had previously coveted the Hardy Casino's earnings. The opportunity to invest in it now was too enticing to pass up, especially with the chance to secure a portion of its profits.
Hardy shook his head. "The casino currently earns $40 million a year, and I believe this will increase. For 30%, $100 million is the minimum."
Giannini considered the price too high.
"$80 million is the most I can offer," he countered.
"$90 million. Otherwise, the casino shares will remain unsold. With 13,000 banks in the U.S., I don't believe you can't find another bank to acquire," Hardy said.
"Alright, deal!" Giannini conceded.
"By the way, you mentioned needing assistance with other matters?" Giannini inquired.
"I've heard you have shares in Pepsi. I'm very fond of that drink. Would you be willing to sell me your shares?" Hardy asked.
Giannini was surprised. To him, Pepsi was merely a beverage brand, overshadowed by Coca-Cola. During World War II, Coca-Cola had seen a surge in demand as it was included in military supplies, whereas Pepsi had struggled and was almost bankrupt. Pepsi's strategy of increasing volume while reducing price had kept it afloat but remained a distant competitor.
"I hold 23% of PepsiCo shares. The company is valued around $16 million. Are you interested?" Giannini asked.
Although Pepsi had struggled recently, Hardy's interest was unexpected. Giannini was willing to sell as Pepsi's value was modest in his view.
"Yes, I'm interested," Hardy affirmed.
Giannini, seeing Hardy's genuine interest, agreed to sell the shares at market price.
The exchange was satisfactory for both parties. Bank of America would benefit from the casino's profits, while Hardy secured the promise of acquiring Wells Fargo and gained shares in Pepsi.
Giannini dined with Hardy that evening, discussing various details. Hardy left after 9 PM.
Later that night, Hardy called the old godfather. The Corleone family owned 39% of the casino shares.
"Mr. Corleone, I'm raising funds and planning to cooperate with Bank of America to acquire a bank. I'm selling them 30% of Hardy Casino shares. I have two options: sell 30% to Bank of America alone, or split it between our two families—20% from me and 10% from Corleone. This way, I'd hold 41%, Corleone 29%, and Bank of America 30%," Hardy explained.
The old godfather, recognizing Hardy's proposal as favorable, responded, "No problem. Corleone's family will cover the 10%."
The Corleone family had benefitted greatly from Hardy Casino's success under Hardy's management. The old godfather understood the value of Hardy's contributions and agreed to support the investment.
"Thank you, Mr. Corleone. I'll arrange the transfer of the 30% shares to Bank of America," Hardy said.
"The money for the bank acquisition will be kept with you for now. If the Hardy Group requires an investment partner in the future, use this money. What do you think?" the old godfather proposed.
Hardy agreed, appreciating the support and acknowledging the potential for future collaborations.
The next day, Hardy and Andy visited Bank of America to finalize the acquisition agreement for Wells Fargo. They signed the necessary documents, securing the bank's support for the deal.
Giannini reached out to Rhide Fargo, the current head of the Fargo family, to discuss the situation. They met at the manor.
"Rhide, someone is looking to buy Wells Fargo," Giannini said with a smile.
"Who?" Reid Fargo asked, surprised.
"Jon Hardy," Giannini replied.
Reid Fargo's anger flared. "Hardy? I heard from the president of the company that Hardy Group is Wells Fargo's largest client. Their business accounts for over 20% of our operations. With such a major client, our performance this year should improve significantly."
"Indeed, Hardy wants to acquire Wells Fargo to streamline his operations. His expanding business portfolio makes owning a bank advantageous," Giannini said.
"Mr. Giannini, I hope you can prevent this. The Fargo family has deep roots in Wells Fargo. We don't want to lose our foundation," Reid Fargo pleaded.
Giannini shook his head. "Rhide, it's not that simple. If Hardy withdraws his business, Wells Fargo will face significant losses. The stock price would plummet, impacting everyone's interests."
"If Wells Fargo's stock price drops significantly, minority shareholders will be forced to sell," Giannini added.
Reid Fargo, realizing the gravity of the situation, understood that it was almost impossible to stop Hardy. Bank of America could easily undermine Wells Fargo if they chose to withdraw their business.
"Fine. I'll discuss this with my family and give you an answer soon," Reid said, frustration evident in his voice.
In the following days, rumors circulated about a potential acquisition of Wells Fargo, causing uncertainty in the market. As speculation grew, Wells Fargo's stock price began to decline.
At a hotel in San Francisco, Hardy welcomed a new guest.
A middle-aged man in his forties entered the hotel. Hardy greeted him with a handshake. "Good afternoon, John."
"Hello, Mr. Hardy," John Ston replied.
John Ston, the current president of Wells Fargo, had been in contact with Hardy before. Hardy admired Ston's managerial skills, as his leadership had significantly improved the bank's performance, particularly through their business dealings with Hardy Group.
The meeting marked a new chapter in Hardy's expanding empire and the ongoing reshaping of the financial landscape.