Chapter 195 Jardines Matheson Announces Takeover of China Gas Company
While Li Mingze and the others were anxiously worrying about how to respond to Jardines Matheson's assault, the Hong Kong stock market was abuzz with activity.
Although it was only the third day of the lunar new year and most people had not yet fully returned to work, it didn't take even an hour after Jardines Matheson publicly announced their acquisition plan for the news to spread among investors.
Hong Kong was a small place, and news traveled fast.
Especially among the regular stock traders, who each had their own information channels.
Thus, those holding shares in China Gas Company didn't care about continuing their New Year celebrations anymore. Making money was far more important.
A sudden and drastic price hike offer wasn't common. Missing such an opportunity would mean waiting who knew how long for another.
At the Hong Kong Electric Group securities office, Lin Haoran and Chen Shoulin were both present.
"Our group's holdings in China Gas Company have surpassed 10%!" At 1:48 PM, the head of the securities department reported excitedly.
"What percentage of the afternoon's total trading volume is that?" Lin Haoran asked.
"About 25% of the afternoon's total transactions. Our securities department isn't as strong as Jardines Matheson's Jardine Fleming Securities. They have more people and greater professionalism. Given that, our performance is quite good—better than expected," the department head replied.
Lin Haoran nodded.
In other words, from the afternoon's opening until now, Hong Kong Electric Group had increased its holdings by 2%, accounting for about 25% of the session's total trading volume, while the entire turnover of China Gas's shares had reached around 8% of the company's total shares.
In less than an hour, 8% of the company's shares had changed hands—an astounding figure.
Lin Haoran wondered how things were progressing at Huanyu Investment.
For now, he didn't disturb them.
Huanyu Investment's trading strength had improved greatly with new professionals, almost on par with Hong Kong Electric Group's securities department. But Huanyu was also tasked with quietly acquiring shares in other companies like Hongkong Land, Jardines Matheson, and Kowloon Motor Bus.
Thus, their acquisition speed for China Gas was somewhat slower.
Meaning Jardines Matheson had likely already increased their holdings by more than 4% in just those 48 minutes.
At this rate, they might acquire another 10% to 15% by the market's close.
Jardines Matheson's power was indeed formidable.
However, considering the shares held among Lin Haoran's side, Jardines Matheson, and the Chinese consortium led by Li Mingze, the free-floating shares available to ordinary investors weren't that many anymore. Trading volume would likely slow toward the end.
Lin Haoran was very curious to see how much Jardines Matheson could ultimately grab.
Time ticked by.
Before they knew it, it was already 4:00 PM—market close.
Hong Kong Electric's securities department began tallying the results.
Within ten minutes, the department head reported to Lin Haoran and Chen Shoulin.
"This afternoon, we increased our holdings by 4.3%. Combined with the 8% we already had, Hong Kong Electric now controls 12.3% of China Gas Company. Most of the shares were acquired in the first two hours. In the last hour, with fewer shares available, we didn't gain much more," the department head reported, handing Lin Haoran a detailed report.
The acquisitions cost Hong Kong Electric about HK$34.4 million.
What about Jardines Matheson's total acquisitions?
That could be roughly estimated.
Besides Jardines Matheson and Lin Haoran's two companies, no one else was aggressively buying.
Li Mingze's group had no intention of buying more—especially at the heavily inflated prices. Otherwise, in the previous timeline, they wouldn't have let Li Zhaoji take control.
Thus, subtracting the shares bought by Hong Kong Electric and Huanyu Investment from the total turnover would give a rough estimate of Jardines Matheson's haul.
The total turnover that afternoon was about 22.1% of China Gas's total shares, with around HK$170 million changing hands.
Clearly, Jardines Matheson's public offer had prompted a flood of selling.
As the saying goes, transactions usually fail not because people don't want to sell, but because the price isn't right.
Well, with a 35% premium, even during the New Year holidays, investors were rushing to cash out.
This wasn't like trying to acquire giants like Wharf or Hongkong Land. Even ten China Gas Companies weren't worth one Hongkong Land.
Still, HK$170 million worth of shares traded in a single afternoon was staggering.
Lin Haoran then called Su Zhixue at Huanyu Investment, who had likely already finished their calculations.
Sure enough, when Su Zhixue picked up, he immediately began reporting the results.
China Gas Company's data was what Lin Haoran cared about most.
As for Hongkong Land, Jardines Matheson, and Kowloon Motor Bus, he wasn't that concerned. Those would be long-term battles.
Especially Jardines and Hongkong Land—both were financial giants.
Kowloon Motor Bus might be easier to tackle.
"This afternoon, we acquired about 3.6% more shares of China Gas. Combined with the 4% we already had, we now hold about 7.6%," Su Zhixue reported.
"Good. I understand. Thank you. I have some things to handle," Lin Haoran said, hanging up quickly.
Thus, he now had a clearer idea of Jardines Matheson's gains.
Huanyu Investment's acquisition was slightly smaller than Hong Kong Electric's—but not by much.
Hong Kong Electric had acquired 4.3%, and Huanyu 3.6%, totaling 7.9%. With total market turnover at 22.1%, Jardines Matheson likely acquired about 14.2%—just shy of their 15% goal.
Clearly, Jardines Matheson's strength was impressive. Their trading arm, Jardine Fleming Securities, even outperformed Hong Kong Electric's securities department and Huanyu Investment combined.
But that wasn't surprising. Jardine Fleming was one of Hong Kong's top three financial firms.
Meanwhile, Hong Kong Electric's financial operations were just a sideline.
Huanyu Investment, although a professional firm, lacked the heritage and experience. It would take time to grow.
While Lin Haoran and his team were analyzing the situation, over at Jardine Fleming Securities, Nobby Jamieson, Buffett and others were gathered in the office.
"Turnover reached 22.1%, but why did we only manage to acquire 14.2%?" Nobby Jamieson frowned.
Their goal had been 15%. Even with such heavy selling, they had fallen short.
"Sir, we discovered that multiple accounts were also buying. We don't know exactly who our competitors were. But even so, 14.2% is very close to our target. Combined with Hongkong Land's holdings, our total control exceeds 40%, reaching 40.7%," the Jardine Fleming general manager reported.
"In China Gas Company, no one can threaten us anymore. Li Mingze and his allies hold less than 33%. Even if they absorbed all the remaining shares—which they clearly didn't—we still hold similar power. Plus, we doubt they did buy those shares," Buffett said with a smile.
"Don't forget—Hong Kong Electric controls 7.2% of China Gas. Could it be that they acquired those shares?" Nobby Jamieson said thoughtfully.
"Even if Hong Kong Electric absorbed them, they can't threaten us. From the moment we launched, Hong Kong Electric no longer had a chance to seize control. Even if they hold 15.1% after all this, it's meaningless.
And without control, why would Hong Kong Electric help the Chinese consortium? It would only offend Jardines Matheson," Buffett said confidently.
After all, holding over 40% of a listed company's shares was overwhelming power.
They didn't know, however, that Lin Haoran's real holding wasn't 7.2% or even 15.1%, but 19.9%—thanks to Huanyu Investment's stealth purchases!
"That's true. At the Governor's banquet on the 16th, I chatted happily with Mr. Lin. He surely wouldn't help Li Mingze's group now," Nobby Jamieson agreed.
"After five years of waiting, we're finally taking over China Gas. It wasn't easy," Nobby Jamieson said, deeply moved and excited.
Years ago, the Chinese shareholders' dominance had left them no opportunity.
It wasn't until they learned that one shareholder was quietly selling that they sprang into action, snapping up those shares through the secondary market.
This had finally given them a chance.
The "Dawn Raid" today solidified it.
Their holdings now exceeded 40%—normal circumstances meant China Gas was theirs.
"Sir, the media reporters should be arriving. Let's prepare," Buffett reminded him.
They had spent noon preparing for this—sending press releases and alerting dozens of mainstream Hong Kong media outlets.
At 5 PM sharp, Jardines Matheson publicly announced the shocking news:
"Jardines Matheson, through its subsidiary Jardine Fleming Securities and in collaboration with Hongkong Land, has secured 40.7% of China Gas Company shares and will officially take over China Gas Company on February 19!"
They announced this unilaterally, without consulting Li Mingze or the other China Gas shareholders.
Because they believed that with their overwhelming shareholding, Li Mingze and the others had no way to resist.
(This chapter ends.)
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