Li Tinto Group's Chairman, Paul Skinner, is reading documents in his office. It is almost Christmas, and he needs to approve all the applications submitted by the companies.
Under normal circumstances, the CEO can decide, but Paul Skinner is also the CEO and is unwilling to give up his authority.
"Chairman, our shares have been rising these few days."
Skinner looked up at his subordinate. "Isn't this a good thing? Our shares had fallen a lot this year, and it is normal for it to start to recover. "
Many people analyzed that the financial market had bottomed out and should start to rebound. It is normal for their company's shares to rise. What is so strange about this?
"Chairman, you did not understand. We discovered that someone is buying our company's shares in bulk."
Huh? Someone is buying Li Tinto's shares in bulk? What is going on? Could it be that someone knows that they are negotiating with Hua Xia's aluminum company and wants to make a fortune?
But this cooperation is still under negotiation, and the framework has not been finalized. It has not been announced to the public. Only a few directors in the company know about this. Did these people leak the news to others?
This is not good. If someone suddenly dumped Li Tinto's shares during the negotiation with Hua Xia, causing their share price to fall, then Hua Xia Aluminum will get more shares for the same amount of cash. This will be a loss for them.
"Do you know who it is? Which country is it from? " Li Tinto's directors are also from different countries. There are the UK, Spain, Australia, Canada, the US, etc. If Skinner knows which country is buying their shares, it will help narrow down the scope of suspicion.
"According to our investigation, it might be from the UK and Russia."
The UK and Russia?
Skinner was a little confused. England was still okay. Other than him, there were two other directors who were English. But there are no directors in Russia. There is only a Deputy CEO. Could it be these people are working together?
That's right. When BHP Billiton wanted to acquire Li Tinto last year, these people had agreed. After news of the acquisition broke out, these people cashed out a lot of the company's shares.
Now that the company's share price has plummeted, they will buy up the shares again and sell them after the share price rises. This must be it.
"Go and inform the board of directors to hold a meeting tomorrow to discuss the year-end matters."
Skinner turned on the computer and saw that the company's stock price was still rising. It had risen by another two percent today.
If there was any good news, it was normal for the company's stock price to soar by 10%. But the company's turnover and profits were clearly decreasing this year, and there was no good news. Why did the stock price rise so much, and for several days in a row?
Although Rito was not as good as Vale and BHP Billiton in terms of iron ore, it was already the world's number one in the aluminum industry and the world's leader in the copper industry. Why should it be acquired by BHP Billiton?
The company was still making money and had not suffered any losses. Why did they have to sell it? Even if he had to sell it, he would never sell it to an ambitious person like BHP Trust!
Last year, when BHP Billiton wanted to acquire Ritto, it did not inform them in advance. Instead, it started to acquire a large number of Ritto Group's shares in the stock market at the same time.
This kind of forced acquisition without the approval of Rito's board of directors was called a hostile acquisition or a hostile acquisition in the industry.
In fact, as the CEO of the company, he did not object to the hostile takeover. This was because to complete a hostile acquisition, the company's shares must be bought at a premium in the stock market. When the stock price rises, all shareholders will benefit. The CEO's task was to let all shareholders benefit. This was not a conflict.
But as the company's chairman, he could not agree to this. Once the other party acquired enough shares, the other party's shares would increase. How could he sit on the chairman's position?
Also, after a hostile acquisition, even if they agreed to convert Ritto Group's shares to BHP Billiton's shares, the other party would buy at a premium. Soon, the company's share price would fall back.
The small shareholders would sell their shares and leave with the money. A major shareholder like him would usually get shares, and he would not be able to sell them in a short time. He could only watch the share price fall. His assets would expand and shrink. How could he feel good about this?
If you really want to acquire, you can. Don't pay with shares. Just pay with cash. If you pay with cash, you don't need to pay with more than 50% premium. If you pay with 20% premium, I will gladly agree.
Generally, after a company is acquired, the management and business will be restructured. His position as the chairman will be gone.
If he is lucky, he can still be a director or CEO. If he is unlucky, he can only be an idle shareholder. How can he accept losing his power suddenly?
Furthermore, in the long run, BHP Billiton's acquisition is borrowing the chicken to lay eggs. This was because BHP Billiton planned to use leveraged buyout. At that time, they offered more than 170 billion USD, but they only offered 10 billion USD.
They used the Ritto Group's shares as collateral and borrowed money from the bank. This is more unacceptable than a debt acquisition.
But fortunately, Ritto Group rejected them at that time. If not, there will be a lot of trouble. Because leveraged buyouts require loans from banks and other financial institutions, and those institutions will convert these loans into bonds.
The end result is BHP Billiton used 10 billion USD to achieve 100 billion USD. The banks and other institutions got the Ritto Group's shares as collateral and the loan interest. They will sell these debts into bonds and look for insurance companies or other banking institutions to guarantee the bonds.
Whoever bought this bond would eventually lose all their money. This was the financial method that Lehman Brothers was best at at that time, asset securitization. Many companies went bankrupt because of this.
When Skinner thought of this, his hand that was flipping through the documents paused.
Wait, hostile acquisition.
Why was the method this time so similar to the method BHP Trust used to acquire Li Tinto Group last time?
Could it be that BHP Billiton intends to launch a hostile acquisition again? This time, did the company's shareholders switch to BHP Billiton?
No, this matter must be investigated immediately. The last time they did this, Ritto Group's share price fell a lot. If this happens again, it will fall even more!
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