After this conversion, the Cavendish Trust will receive approximately 2.726 billion Standard Chartered Merrill Lynch ordinary shares; the BFT Fund will receive approximately 1.429 billion Standard Chartered Merrill Lynch ordinary shares.
In this way, the shareholding ratio of Standard Chartered Merrill Lynch is as follows: Cavendish Trust holds approximately 60% of its shares (it originally held 65% of Standard Chartered Bank's shares in the name of DS Holdings, plus the 2.726 billion common shares obtained after the debt-to-equity swap, the shareholding ratio after the merger); BFT Fund holds 19.97% of its shares; Rich23 Capital holds 5% of its shares; Caesar Fund holds 0.7% of its shares (from the Caesar Fund's investment in Merrill Lynch and the exchange of Merrill Lynch shares when Standard Chartered Bank acquired Merrill Lynch)...
It can be said that after the debt-to-equity swap, Baron controlled a total of approximately 85.67% of Standard Chartered Merrill Lynch's shares through the various investment companies and funds under his control. The remaining 14.33% of the shares belonged to the original Standard Chartered Bank's circulating shares in the secondary market and the shares exchanged by the original Merrill Lynch shareholders.
Although Standard Chartered Merrill Lynch's total share capital increased significantly after this debt-for-equity swap, the successful conversion of the vast majority of its interest-bearing debt into common stock—which no longer required interest payments—was a boon for the company.
Over the following week, Standard Chartered Merrill Lynch's share price saw a slight increase, from approximately £9.75 to approximately £10.20 (US$18.36). This boosted Standard Chartered Merrill Lynch's market capitalization to over US$131.3 billion, surpassing Royal Bank of Scotland and becoming the second-largest listed bank in the UK, behind only HSBC Holdings.
In fact, HSBC Holdings suffered significant losses during the subprime mortgage crisis, and its stock price has fallen significantly this year. Its current market capitalization is only less than $10 billion higher than that of Standard Chartered Merrill Lynch.
This debt-for-equity swap of Standard Chartered Merrill Lynch will become Baron's primary method for increasing his holdings in listed companies during the subprime mortgage crisis when their share prices are low. He uses his fund to purchase preferred shares or bonds to finance acquisitions and expansions, then converts them into common stock when the stock price dips.
The only difference is that his fund previously sold off holdings in companies like Woaw Technologies, SEM Group, and O2 Telecom when their share prices were relatively high, generating significant capital gains.
However, neither DS Holdings (Cavendish Trust) nor Rich23 Capital has reduced its holdings in Standard Chartered.
This is because Standard Chartered's acquisitions of assets like Northern Rock, Merrill Lynch, and IndyMac were considered relatively risky by the outside world, likely containing a significant amount of non-performing assets.
Furthermore, the scale of the acquisitions, from Standard Chartered Bank to Standard Chartered Merrill Lynch, is enormous.
Therefore, Barron needed to maintain absolute control of Standard Chartered (DS Holdings, together with Rich23 Capital, controlled 80% of Standard Chartered's shares). Otherwise, even if his stake exceeded 50%, he would still be subject to the board's "noise" in the decision-making process, requiring him to expend even more energy convincing the board to proceed with these acquisitions.
Now, after completing this series of operations and acquiring Merrill Lynch, Barron still controls over 85% of Standard Chartered Merrill Lynch's shares, effectively securing absolute control over the bank, the second-largest listed bank in the UK after HSBC Holdings and the sixth-largest listed bank globally (behind Hua Xia Industrial and Commercial Bank of China, HSBC Holdings, Hua Xia Construction Bank, Bank of America, and Hua Xia Bank).
...
"Did you buy Valentino?"
Barron asked Beatrice after meeting her in Paris.
"Yes, the Gucci-Hermès Group inquired about the price of this brand from the Permira Investment Fund, and after negotiations, they bought it..."
Beatrice had her reasons for being concerned about Valentino, which Barron had just acquired. After all, her uncle was once the president and chief designer of Valentino, but later he was involved in a tax evasion case. Last year, their family participated in the sale of the Valentino Fashion Group to the British Permira Investment Fund for 2.6 billion euros. The reason Gucci-Hermès didn't participate in the Valentino Fashion Group acquisition was primarily because, in addition to brands like Valentino, the company's assets at the time were largely comprised of the German Hugo Boss brand.
Clearly, Gucci-Hermès wasn't interested in this brand.
However, with the subprime mortgage crisis looming, and Permira Investments struggling during it, Gucci-Hermès seized the opportunity to approach them about acquiring Valentino.
Under the agreement, Gucci-Hermès would acquire the operating rights to Valentino and M Missoni for €600 million.
Permira Investments would spin off Valentino Fashion Group, separating the German brand Hugo Boss from the group and then selling the remaining Valentino and M Missoni brands to Gucci-Hermès.
This isn't just Beatrice; her sisters, due to their previous ties to Valentino, are also the most frequently worn fashion brand.
After her mother's family sold the brand, it finally found its way to Barron, who delighted her.
After all, women are always sentimental, and to her, this represented a connection between her family and her lover.
For quite some time before this, Barron had been mostly in Asia and North America, so he and Beatrice hadn't seen each other for a while. Beatrice wasn't idle either, having devoted almost all her energy to her studies. She said she could graduate a year early next year.
After graduation, Beatrice planned to continue her studies in the United States, a move Barron was quite supportive of.
After all, they had been apart for a long time, and as the saying goes, a brief absence is like a new marriage. Upon meeting again, Barron fully felt the girl's warmth...
While this trip to Paris wasn't just for a private reunion,
it was still best to appease her longing.
After checking the girl's learning progress, Barron taught her everything he knew without reservation, allowing Beatrice to learn a lot in the past two days...