The news of Jiangnan Group publicly launching an acquisition of Amazon spread throughout the United States, drawing the attention of many.
While acquisitions happen almost daily, when the target is a company valued at over twenty billion US dollars, it becomes top global news, captivating everyone's attention.
Naturally, most people were merely spectators. However, the shareholders of Amazon were ecstatic because, following the announcement, Amazon's stock price began a continuous surge. In just one day, it rose by approximately 20%, climbing from its previous market capitalization of $21 billion to around $25 billion, directly returning to its peak valuation.
The shareholders weren't foolish. Jiangnan Group was initiating an acquisition, and it was a negotiated acquisition. Rumors suggested a privatization process would follow, aiming to reclaim all of Amazon's shares and transform it back into a wholly-owned subsidiary.
If all outstanding shares were to be repurchased, the stock market regulations would mandate a premium payment. The higher the current stock price, the more acquisition funds shareholders would receive from Jiangnan Group. When else would be a better time to rush to buy Amazon shares?
Consequently, Amazon's stock price immediately experienced a surge. The total market capitalization of $25 billion was merely a prelude. By the next day, it was heading towards $27 billion. Many experts boldly predicted on television that Jiangnan Group might have to spend at least $30 to $35 billion to acquire the entire Amazon company.
Of course, facing this situation, Hao Jianguo, responsible for the acquisition, was not foolish enough to let the stock price spiral uncontrollably. After all, the price of acquiring shares from other major shareholders would be referenced against the market price.
Therefore, Hao Jianguo ordered the company to immediately release news stating that Jiangnan Group had only prepared $25 billion for the acquisition of Amazon. If the acquisition cost exceeded this amount, Jiangnan Group would abandon the deal.
Naturally, this was leaked through unofficial channels. Jiangnan Group would not issue any official announcement. Otherwise, if they could acquire Amazon for just $26 billion in the future, the question of whether to proceed would arise. If they didn't buy, they would miss an opportunity. If they did buy, it would be considered deceiving shareholders, who could then sue Jiangnan Group based on the announcement.
As this news spread, Amazon's market capitalization indeed began to fall, eventually stabilizing around the $25 billion mark. Seizing this opportunity, Hao Jianguo commenced negotiations with other Amazon shareholders, indicating that Jiangnan Group's bottom line was around $22 billion and expressing a desire to acquire all Amazon shares at this price.
What followed was a series of intense negotiations. The specific details of the process will not be elaborated on to avoid perceived filler. Suffice it to say that through a week of arduous negotiations, working tirelessly, Hao Jianguo finally reached an agreement with a portion of the shareholders, acquiring 21% of the shares for $6 billion.
Hao Jianguo then excitedly reported his progress to Boss Huang, detailing the week's negotiation developments.
Upon hearing the news, Huang He was also thrilled, as Jiangnan Group now controlled over 56% of Amazon's shares, establishing absolute control.
Huang He once again praised and commended Hao Jianguo, making the latter somewhat embarrassed. Hao Jianguo modestly replied, "Boss, the smooth progress of this acquisition is primarily due to your direction in using the floating acquisition method!"
"Floating acquisition method? Was that my direction? Didn't you tell me about it?" Huang He said with a smile.
"Not at all, I merely mentioned it casually and never imagined it could be used for acquisitions. This is all your accomplishment, Boss!" Hao Jianguo quickly responded.
The floating acquisition method had indeed proven invaluable in this acquisition.
About three days prior, the negotiation process encountered a significant hurdle: Amazon's investors could not agree on a unified selling price.
Among the remaining shares, over a hundred investment institutions held Amazon stock. These institutions found it difficult to reach a consensus on the selling price of Amazon shares.
Some believed selling at $28 billion was acceptable, while others insisted on $30 billion. The most unreasonable institutions demanded $40 billion.
This made it challenging for these institutions to agree on a unified price, hindering the continuation of the acquisition.
At this point, one might wonder, couldn't they first reach an agreement with some institutions and buy a portion of the shares? Why the insistence on agreement from all institutions?
The reason was simple: no institution wanted to be at a disadvantage.
Suppose they first reached an agreement with institutions willing to sell at $28 billion and purchased their shares. If a few days later they bought shares from other institutions at $30 billion, wouldn't the initial sellers have lost a significant amount of money? How could these institutions' managers explain to their own shareholders why others made more money while they made less?
Furthermore, Jiangnan Group could not commit to acquiring shares at a single price, as their initial intention was privatization, planning to acquire all shares.
Thus, the entire negotiation process reached a deadlock. Hao Jianguo negotiated with these institutions during the day and discussed strategies with Boss Huang via conference calls at night, a process that was extremely arduous.
Until three days ago, Hao Jianguo casually mentioned the term "floating acquisition method" during a conversation. He didn't elaborate further, but it piqued Boss Huang's curiosity, leading Huang He to figure out the meaning of the floating acquisition method himself. Subsequently, Huang He proposed using this method to acquire the shares from these large institutions.
The so-called floating acquisition method meant that although shares were acquired from one party at a certain price, this price was not final and could still fluctuate.
Specifically, if Jiangnan Group later acquired shares from other institutions at a higher price, the price for the previously acquired shares would be settled based on this later quotation. Jiangnan Group would be responsible for compensating the difference.
If Jiangnan Group failed to pay the difference, the stock transaction would be invalidated, and the institution could retain 30% of the funds as a penalty for breach of contract.
However, if the later acquisition price was lower than the previous one, no adjustment would be made.
Upon the announcement of this acquisition policy, it received approval from a portion of the institutions. This was because they no longer had to worry about their acquisition price being lower than that of other institutions. Thus, they could confidently sell their shares to Jiangnan Group first.
This policy was also feasible for Jiangnan Group. Although it might lead to situations where they could not afford the acquisition costs when facing excessively high bids from some institutions later on.
However, this agreement could also be used to pressure institutions against raising prices. After all, if Jiangnan Group had to pay higher prices for their shares, it would passively incur the appreciation of all previously acquired shares, costing billions more. In such a scenario, Jiangnan Group would be forced to purchase shares at the earlier acquisition price, effectively setting a mutually understood, insurmountable bottom line.
Unless the other party genuinely believed Amazon's stock price would continue to rise, they would be willing to accept the current price and sell their Amazon shares for profit.
This was a form of overt strategy.
As expected, the floating acquisition method proved remarkably effective, immediately gaining approval from a portion of the institutions. Within three days, acquisition agreements were signed with 36 institutions, ultimately purchasing those 21% of the shares.
However, some institutions still refused to agree to the current price, leaving 44% of the shares outstanding.
Naturally, Hao Jianguo was very shrewd. Although the floating acquisition method was conceived by Hao Jianguo, he very cleverly presented it to Boss Huang, allowing Huang He to propose it. This channeled most of the credit to Huang He, naturally making him very happy and satisfied.
Therefore, even though the acquisition price had exceeded the previously agreed-upon total of $25 billion, reaching around $28 billion, Huang He tacitly accepted it and even proactively asked, "Do we have enough money?"
"The crucial part is here!" Hao Jianguo thought, then said with extreme sincerity, "Boss, I'm afraid we are still short!"
"How much are we short?"
"At least $4.2 billion!" Hao Jianguo began to calculate. "We acquired 21% of the shares for $6 billion this time, meaning each 1% of shares is valued at around $300 million. It's difficult to conceal this acquisition price from other shareholders, so the price for continuing to acquire shares from them cannot be lower than this. Therefore, the remaining 44% of shares will require approximately $13.2 billion. However, the final figure will clearly be higher than $13.2 billion."
"Concurrently, out of the $15 billion I had, $6 billion has been spent, leaving only $9 billion. So, conservatively, we need at least another $4.2 billion in funding!"
"Four point two billion dollars, that's quite a lot!" Boss Huang's voice sounded a little worried. "While the company still has some funds, the group's monthly operating costs are already in the hundreds of millions of dollars. It's impossible to squeeze another $4.2 billion from here to support you!"
"If that's the case, sir, I suggest we take our winnings," Hearing Huang He's words, Hao Jianguo showed no inclination to push Boss Huang for more money. Instead, he advised, "Boss, we have already secured 56% of the equity, making us Amazon's undisputed largest shareholder. Therefore, there's no need for us to acquire all the shares as per the original plan!"
"Perhaps it's better to take a step back and let things unfold. After all, our original goal was merely to have Amazon cooperate with our Wild Horse Wallet in the west. With our current share advantage, we can fully demand in the board meeting that Amazon exclusively use the Wild Horse Wallet as its sole payment tool!" Hao Jianguo said.