Chapter 328 Jardines-Land Development Cross-Holding, Li Jiacheng Sells His Land Development Shares
"Mr. Niu Bik Kin, after thinking carefully these past few days, I believe your proposal for Jardines and Land Development to cross-hold each other's shares is excellent. However, I think the current progress is too slow. I suggest we push the implementation forward as quickly as possible. Especially, Land Development should also hold a portion of Jardines' shares. Only in this way can Jardines completely prevent Chinese capital from coveting it. I believe both companies should increase their holdings simultaneously, not step by step. Ideally, we should complete this within two months!" Henry Keswick said solemnly. His real purpose was simple: as discussed in the private meeting, he wanted Land Development to control Jardines. That way, all Jardines shareholders' stakes would be diluted. For example, Lin Haoran currently held about 20% of Jardines' shares. But once Jardines issued more shares, that stake would shrink. They could then use Land Development's controlling interest plus their own shares to call a board meeting and expel Lin Haoran from Jardines' board.
In Henry Keswick's mind, Land Development was still firmly under British control. Although there were rumors of someone secretly acquiring shares, Henry didn't believe it was Lin Haoran. Acquiring 20% of Jardines was already a massive financial undertaking. Land Development's share price was nearly double that of Jardines — it would require far more capital. When Lin Haoran announced his bid for Jardines, many assumed the earlier rumors of him targeting Land Development were just lies.
Hearing Henry Keswick's words, Niu Bik Kin didn't think too deeply. He simply nodded and replied, "Mr. Henry, I will do my best to speed things up. With everyone's support, everything will proceed more smoothly. Originally, we planned to complete it within six months, but with full support, I believe we can finish it in one month."
Two days later, on October 3rd, Jardines Matheson and Land Development Corporation jointly announced a series of transactions: Jardines transferred assets worth HKD 1.195 billion to Land Development in exchange for 64 million newly issued shares. These assets included a 50% stake in the World Trade Centre in Causeway Bay and 33 million shares of Wharf Holdings A shares. After this, Jardines' stake in Land Development rose from 20% to 27.8%. Then, on October 8th, Jardines issued another 25 million new shares to Land Development, purchased with cash. At the same time, Land Development had silently accumulated another 5% of Jardines' shares on the secondary market. On October 24th, Land Development announced it now held 30.1% of Jardines, while Jardines held 30.2% of Land Development.
In less than a month, through new share issues and secondary market purchases, both companies had become major shareholders of each other. Originally, in the historical timeline, Jardines would have held 40% of Land Development and Land Development about 38% of Jardines. But in this world, because Lin Haoran had absorbed much of the free-floating shares earlier, both sides had only managed about 30%. Thus, many Chinese capital groups, seeing this, completely abandoned any thoughts of acquiring either company.
Especially Li Jiacheng. After seeing the developments, he abandoned his idea of buying Lin Haoran's Jardines shares. Moreover, the 5% stake he held in Land Development suddenly seemed much less valuable.
In a small 30-square-meter conference room at Cheung Kong Holdings' headquarters, Li Jiacheng met with his close aides to discuss one question: should they sell their Land Development shares? "Mr. Li, I think it's better to sell. At the current price, even if we don't make much profit, at least we won't lose," said one advisor. "I agree. Given the situation, neither Cheung Kong nor Hutchison Whampoa will be able to seize control. Holding the shares would tie up capital needed for our expansions," another added. "I also support selling," said another.
All opinions pointed the same way: better to sell than to stubbornly hold onto a hopeless investment. Jardines now controlled 30.2% of Land Development, and the British consortiums held another large chunk. Together, they had over 42% — public information that anyone could verify.
Li Jiacheng remained expressionless for a long moment, then finally said, "Then sell." These advisors had been instrumental in his rise to power, so he valued their opinions greatly. Still, he couldn't hide a sliver of regret. Whether Jardines or Land Development, he had coveted them both. But now, with this cross-holding scheme, his dreams had crumbled.
"These British consortiums... very clever," he muttered. His acquisition had been incredibly discreet; only Lin Haoran had known. Yet the British reacted with such heavy-handed tactics. Their move completely shut out Chinese businessmen like him.
"Mr. Wu, what's Land Development's current market value?" Li asked his head of securities. "Mr. Li, it's about HKD 12 billion. Our 4.32% stake is worth around HKD 520 million," Mr. Wu answered. Due to new share issues, Li's holdings had been diluted from over 5% to 4.32%, though the stock's appreciation had kept the value steady.
Li Jiacheng nodded, contemplating whether to sell to Lin Haoran, dump the shares in the open market, or sell to the British consortiums. Selling on the market risked fetching less than HKD 520 million, especially if Land Development's price fell further. And there was no shortage of sharks waiting to pounce if he tried.
Selling to a private buyer would be tricky — no one wanted minority stakes without a chance to control the company. But Lin Haoran would buy. Li knew it. Lin held significant Land Development shares and had previously offered HKD 500 million. Although the British might offer slightly better terms, Li was reluctant to offend Lin.
In Hong Kong's business world, few understood Lin Haoran's true strength — but Li Jiacheng did. In his mind, Lin Haoran's wealth already surpassed Bao Yugang's. Was it worth it to offend such a man for a few extra million?
No.
One mistake now could make Lin Haoran a permanent enemy — something he could not afford. Reflecting on Lin Haoran's secret control of Land Development, Li placed him half a level above himself. Meanwhile, his ties with the British consortiums had always been strained. Thus, after careful consideration, Li Jiacheng decided: he would sell his Land Development shares to Lin Haoran.
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