Chapter 374 Cavendish Garden

The next day, Barron took the Hearst sisters and flew from Yanjing to Shanghai.

It was precisely because this time I came to China to live with the Hearst sisters that I declined Wang Zhongjun's "good intention" last night.

The reason why he arrived in the Magic City today was that, in addition to basically finishing the matters in Yanjing, Barron also wanted to talk to Boss Ma about the Alibaba Company as soon as possible.

"Your Highness the Duke, this is a report from Ms. Zeng from Standard Chartered Bank on the listing of Bank of Communications."

"OK."

After taking the folder handed over by Wang Wanting, Barron started to look through it.

Since Standard Chartered Bank completed its investment in Huaxia Communications Bank last year, the other party has started the IPO listing process.

At the very beginning, Bank of Communications' plan was to conduct an IPO on both the Hong Kong Stock Exchange and the Shanghai Stock Exchange.

However, due to the sluggishness of the mainland A-share market during this period, after consideration, the A+H issuance plan was finally abandoned and H-shares were listed separately in Hong Kong.

This will also become the first mainland bank to be listed in Hong Kong, which can be said to have attracted much attention.

In this IPO of Bank of Communications, a total of 5.856 billion H shares will be issued in Hong Kong, accounting for 13% of the total share capital after the issuance. Therefore, Standard Chartered Bank will also participate in the subscription of new shares - according to the previous investment agreement, After Standard Chartered Bank invested in Bank of Communications, it has anti-dilution rights and can subscribe for corresponding shares when new shares are issued to keep the shareholding ratio within 19.9%.

It can be said that Barron attaches great importance to the development of Standard Chartered Bank in Asia, especially Greater China.

For this reason, after coming to China, he specifically asked Zeng Jingxuan, President of Greater China of Standard Chartered Bank, to pass this information to him.

In addition to investing in Bank of Communications, Standard Chartered Bank also invested in the newly established Bohai Bank last year, holding 19.99% of its shares.

But at the same time, Barron's 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, at the beginning of 2005, Standard Chartered Bank reached an agreement to acquire all shares of South Korea First Bank, and would pay approximately 3.4 trillion won in cash ($3.3 billion) to complete the transaction. acquisition of this 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 acquisition, South Korea's First Bank had total assets of approximately US$44 billion and a total of 394 branches in various locations.

In fact, Standard Chartered purchased the bank from American Capital at the time.

South Korea's First Bank was in trouble after the Asian financial crisis. American NewBridge Capital acquired 48.56% of the bank's shares in 1999.

In the following five years, Newbridge Capital helped South Korea's First Bank turn a profit, doubling its total assets to more than US$40 billion, and 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 US$3.3 billion to acquire the First Bank of South Korea is relatively high... This price is equivalent to 1.87 times the book value of the First Bank of South Korea in September last year!

Especially after it acquired South Korea First Bank from Standard Chartered Bank and renamed it Standard Chartered South Korea First Bank, its development was not smooth.

At the beginning, their idea was also very good. After all, the banking industry in South Korea was twice the size of Hong Kong at that time. This acquisition will help accelerate the development of Standard Chartered Bank in the local area, which can bring value-added opportunities to shareholders.

They believe that after the acquisition is completed, the assets of South Korea First Bank will account for 22% of the group's total assets in terms of assets, and will increase Standard Chartered Bank's income by 16%. South Korea will become Standard Chartered's second largest market. , second only to HK.

But the fact is that after completing this acquisition, their progress in South Korea was not smooth. Especially in attracting lenders, they encountered difficulties and their development was not as expected.

And in order to optimize the incentive system of South Korea First Bank, when they carried out the performance-based salary system reform, they received strong opposition from local employees and triggered a strike that lasted for more than a month...

Finally, in 2005, the total assets managed by the First Bank of South Korea were as high as 44 billion U.S. dollars. But fifteen years later, the total assets they managed were just over 60 billion U.S. dollars. The increase was not much. To say that the effect of this acquisition is not satisfactory.

Especially in Barron's view, it is not cost-effective to use the US$3.3 billion to acquire the First Bank of South Korea now. It is better to invest these funds in the reform of Hua Xia Bank and invest in holding those Bank shares…

Moreover, it is not easy for the current Standard Chartered Bank to come up with such a sum of money. In the original time and space, Standard Chartered Bank completed the acquisition with funds obtained through allotment of shares. Now that he knows the future situation of this acquisition, Barron also He did not hesitate to reject the management proposal of Standard Chartered Bank to acquire the First Bank of South Korea, and instead asked them to use more funds to participate in the reform of Hua Xia Bank.

You know, take their previous investment in the Exchange as an example. At that time, they nominally invested US$1.747 billion and obtained 7.775 billion shares, with a shareholding ratio of 19.9%.

This time, when Bank of Communications went public in Hong Kong for its IPO, based on its issue price of only HK$2.50, the Bank of Communications shares held by Standard Chartered Bank were worth nearly HK$19.5 billion, equivalent to US$2.5 billion. It has already made a lot of money... …

What's more, in this investment itself, Standard Chartered Bank did not invest such a high amount of money. The investment in real money was far less than US$1.747 billion. Many of the investments were offset by their resources and services...

And with the development of China's economy, the value of these Bank of Communications stocks will also allow them to get huge profits in the future, which is far more than spending so much money to buy the First Bank of South Korea, which is ranked seventh in South Korea at this time. A good deal.

Even if we really need to enter the South Korean market, there will be a better opportunity when there is a subprime mortgage crisis in the future...

So after Standard Chartered gave up the fight for the First Bank of South Korea, the bank eventually fell into the hands of their competitor, HSBC.

In this regard, Barron could only praise silently, "Well done."

"Your Highness the Duke, Mr. Ma has arrived."

Hangzhou is not far from the Magic City, so soon after Barron arrived here, Ali's boss Ma had already received the news and came to the Yan Family Garden at No. 699 Yuyuan Road... Well, it has now been renamed Cavendish garden.