When Lin Ching-ah and Tim Cook met, Apple's executives had already set the base price for selling Apple.
Since they couldn't rely on the stock market to cash out on a large scale, they couldn't solve the huge dilemma facing the iPod business, and Apple couldn't find a way to break out of the predicament. So, they significantly lowered their offer and base price to avoid trouble.
The offer was based on the current market value of the agreement. If the market value of Apple was 3 billion USD on the day the agreement was signed, then Makino Technology would use this market value as the benchmark to pay the corresponding funds to Apple's shareholders.
The base price was based on 80% of the current market value of the agreement. The actual market value was also 3 billion USD, and Makino Technology only needed to pay 2.4 billion USD as the benchmark.
Whether it was the offer or the base price, Makino Technology had to acquire the shares of Apple's major shareholders and complete the privatization of Apple. In other words, they had to help Apple solve the problem of the shareholders.
Previously, Microsoft wanted to use 1.5 billion USD to buy the Mac OS and PC business, and then leave the iPod business to Apple. This meant that after Apple's shareholders received the 1.5 billion USD, they had to use some of it to solve the iPod business.
The funds obtained from the sale of major assets of a listed company could not be directly put into the pockets of these shareholders. If they wanted to be safe, they had to privatize the company, and they had to give the current shareholders and investors a satisfactory explanation. This meant that they had to use some of the 1.5 billion USD to subsidize the shareholders, and the remaining money was not even enough to fill the gaps between their teeth.
If Makino Technology could help Apple solve the problem of the shareholders and complete the delisting of Apple, then these shareholders could cash out and leave in peace.
Lin Ching-ah was originally prepared to have a tug-of-war with Tim Cook, but she did not expect that the price Tim Cook offered on behalf of Apple was even lower than the base price Li Mu expected.
Li Mu originally thought that the ideal price was to sign the agreement with Apple's shareholders at about 120% of the market value, and then subsidize the shareholders at about 150% of the market value to force Apple to complete the delisting. He did not expect the price to be lower than the base price he expected.
Li Mu did not fully understand the current anxiety of Apple's shareholders, and Apple did not fully understand Li Mu's true intentions for Apple. One felt that Li Mu might not be willing to buy, and the other felt that Li Mu might not be willing to sell. That was why there was such a gap.
For Apple, they really did not dare to scare away Li Mu, a potential buyer. This was no longer the time when Apple was a rare commodity. Now Apple had become a mess that no one was willing to take over. It was already very rare for Apple to meet someone who took the initiative to ask for an inquiry. If they wanted to rip off another person, they would really be playing with their own hands.
Apple's offer was a bit unexpected to Lin Ching-ah, but she still played her professional qualities very well. She represented Li Mu to express to Tim Cook that Makino Technology did not have a high desire to buy Apple. There were two main reasons why they wanted to buy Apple. One was that they were interested in combining Apple's computer operating system and the design and manufacturing of the whole machine with Makino Technology's Shenzhou, which they had a stake in, to compete with Microsoft in the future. The other was to further eliminate the competitors in the development of Mango-ME.
Lin Ching-ah even told Tim Cook that according to Li Mu's intentions, if Makino Technology really bought Apple, he would directly abolish the iPod product line, including but not limited to termination of research and development, termination of all sales channels, and even destruction or dismantling of all iPod stocks.
In this way, it meant that Makino Technology had to bear all the costs of abolishing the iPod business. But now it seemed that the iPod business was on the verge of death. Makino Technology did not have to abolish the business himself and let it die in the hands of Apple. This was no different from Microsoft's current attitude.
After saying this, Lin Ching-ah changed the topic and said to Tim Cook, "However, our Li Zong respects Apple very much. He feels that if certain conditions are met, Makino Technology can help Apple bear all the costs of the iPod business."
Tim Cook nodded and asked her, "What are Li Zong's conditions?"
Lin Ching-ah said, "The first condition is that Apple must ensure that more than 90% of the core team members do not move for three years. That is to say, Mr. Cook, including you, Apple's senior management, core leaders, and core staff, must continue to work for Apple after Makino Technology acquires it for the next three years. In order to increase the binding force, everyone must sign separate agreements with Makino Technology. If you want to leave in the next three years, you must pay at least three times the salary of your three-year contract as compensation, and sign a three-year non-compete agreement."
Three years of core team members not moving, three years of compensation, and three years of non-compete agreement. This was the "333" plan that Li Mu made for Apple's core team.
Take Cook for example. If his current annual salary was five million USD, Makino Technology would sign an agreement with him for three years and a total of 15 million USD. If he worked for three years, he could take at least 15 million USD. However, if he wanted to quit early, even one day earlier, he must pay 45 million USD to Makino Technology and promise not to work in any industry that overlapped with Makino Technology's business for three years after he quit.
Such an agreement seemed to be very harsh and somewhat unfair to individuals, but in fact, as long as both parties agreed, it was legally binding. This was the same as the brokerage contract signed between a management company and a star. If you were obedient, you would be guaranteed to make a fortune, but if you dared to be disloyal, you would have to pay a large sum of money first, and then be restricted from developing in other companies. If you dared to be a hooligan, you would definitely be sued until you went bankrupt.
Tim Cook felt that Li Mu's conditions were a bit too harsh. Three years was not a long time, but it was not a short time either. If something happened during this period, wouldn't he face a huge responsibility? Even if he agreed, others might not agree.
At this time, Lin Ching-ah added, "Of course, we are not blindly restricting you. As long as you comply with our requirements, Makino Technology will also give you enough financial compensation. For example, we will give all Apple's core team members 150% salary, and promise to give you a considerable number of original options of Makino Technology. The IPO of Makino Technology at the end of this year or next year will be a very good opportunity for you."
Cook nodded gently. In this case, he felt much better. Blindly restricting people would give them a huge sense of oppression, but if they were relaxed in other ways at the same time, this sense of oppression could be neutralized. 150% salary, plus the options of Makino Technology, such a good income condition, presumably most people would not refuse.
So Cook asked her, "Boss Lin, do you have any other preconditions?"
"Yes." Lin Ching-ah said, "Just now, you have to ensure that more than 90% of the core team members will not change, and more than 80% of the basic team members will not change. So the second precondition is that the other 10% to 20% of the team members who may have changes must sign a three-year non-competition agreement if they decide to leave Apple. During these three years, they must not engage in any profession that overlaps with Makino Technology's business. In exchange, Makino Technology will also pay them an additional year's salary as compensation for the non-competition agreement."
Cook was a little confused.
Why did Li Mu impose so many restrictions on the core team of Apple? The more such restrictions in business, the more it showed the fear in the other party's heart. But what was Li Mu afraid of Apple?
Lin Ching-ah saw that Cook was a little confused and said indifferently, "Mr. Cook, you don't have to think too much. Our Li Zong likes to cut the weeds and eliminate the roots. Even if there is a one in ten thousand risk, he will try to eliminate it as much as possible in advance. And you have to be clear that our request for you to ensure that the team does not change as much as possible is far better than asking you to carry out large-scale layoffs. If it is the latter, you will have to pay an astronomical amount of compensation alone."
Cook suddenly felt a chill on his back.
Cut the weeds and eliminate the roots. Was this Li Mu's secret to victory all along? Cook had studied the history of Li Mu's development. A lot of companies and products died in the hands of Li Mu, but none of them could persevere under Li Mu's formation. Tengxun became history, and so did Alibaba. At the same time, a bunch of people were sent to the detention center, waiting for criminal trials. It could be said that these two opponents were eliminated by Li Mu.
And now, Li Mu's target was Apple.
Cook suddenly thought of what Lin Ching-ah had just said and Li Mu's general idea for the iPod business. Under normal circumstances, since Makino Technology had acquired Apple, it was completely possible to dump the inventory of iPods at a low price to recover part of the losses. If the inventory iPods, which had a market value of US $100 million and a cost of US $60 million, were sold at a price of US $40 million, the overall actual loss would be about US $20 million, recovering 66.6% of the losses. This was also the operating method that most companies and entrepreneurs would choose.
But what Li Mu wanted was not to sell the inventory at a low price to reduce the losses. Instead, he wanted to destroy all the inventory iPods so that the iPods would disappear from the market as soon as possible. This also reflected Li Mu's character of cutting weeds and eliminating the roots.
Cook was frightened by Li Mu's strategy, but he tried not to show it so obviously. He then asked Lin Ching-ah, "Boss Lin, is there anything else?"
Lin Ching-ah nodded and said, "The third and last condition is that Mr. Jobs must rejoin Apple, and then apply for the 333 Plan. If he does not rejoin Apple, he must sign a six-year non-compete agreement with Makino Technology."
Li Mu was not willing to let Jobs do whatever he wanted outside after acquiring Apple. Li Mu did not dare to doubt Jobs' ability, creativity, and vision. He respected and admired Jobs very much, but now he had to lock him in his own system. Otherwise, Jobs was likely to become a huge hidden danger in the future development of Makino Technology.
Cook said subconsciously, "Boss Lin, Mr. Steve Jobs has left Apple. Strictly speaking, he is not an employee of Apple now. Apple has no binding power on him."
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