San Francisco.
Inside a villa in the hills of Woodside, west of Palo Alto.
As dawn broke, Simon, sensing movement beside him, instinctively reached out, pulling a slender waist into his embrace.
Jennifer, who had just picked up a small vest to put on, was pulled into Simon's arms, pressed close against his chest. Knowing how much he liked this feeling, she didn't resist and leaned against him for a while before gently coaxing him like a child, "Will you let me go? I want to prepare breakfast for you, and I have to go back to work later".
After attending MCA chairman Lew Wasserman's cocktail party last night, the female assistant, despite initially saying no, was still 'kidnapped' by Simon to San Francisco.
Simon's large hand roamed over the female assistant's body as he said, "Sleep with me a little longer. Allison and the others will prepare breakfast".
"But I want to prepare it for you myself".
"Alright".
Feeling Jennifer's persistence, Simon had no choice but to let go. Watching the female assistant put on her vest and briefs before getting out of bed and heading to the bathroom, he quickly sat up as well.
In the early 1990s, the hills of Woodside weren't as bustling and crowded as they would become after the internet era began. In late August, being in a Mediterranean climate zone, the surroundings were still vibrant and full of life.
While the female assistant prepared breakfast in the kitchen, Simon changed into a tracksuit and left the house, jogging along the tree-lined, sparsely populated mountain asphalt road.
Such unconstrained freedom was a rare opportunity for Simon now. The area around Malibu, where he usually lived, was relatively densely populated, and his every move would attract attention. On weekdays, he could only exercise in the villa's gym, and if he went to New York, the situation would be even more restrictive.
As he was running, a black Mercedes sedan suddenly slowed down and pulled over. The window rolled down, and a middle-aged man looked out at Simon, saying, "Hey, buddy, there are two people behind you..." Halfway through his sentence, the middle-aged man recognized Simon, surprised and somewhat uncertain, he asked, "Are you, um, Simon Westeros?"
Understanding that the middle-aged man was kindly warning him about two people trailing him, Simon stopped, smiled, and nodded, greeting, "Good morning".
The two bodyguards who had been jogging with Simon also quickened their pace, catching up cautiously.
The middle-aged man realized he had made a mistake and got out of the car to greet Simon. It turned out he was an executive from Oracle. Before leaving, he even left a business card. Simon casually handed the card to Neil Bennett behind him and continued his jog. Ten minutes later, he returned to his residence, where the female assistant had already prepared breakfast.
He didn't let the two A and B girls who came with them help; the two of them personally carried the breakfast into the dining room.
While eating breakfast, the female assistant brought up the cocktail party from last night: "Wasserman has discovered our plan. What do you intend to do next?"
At the cocktail party last night, Lew Wasserman directly stated that he was aware of Simon's preparations to acquire MCA. He even proactively disclosed some progress in Panasonic's negotiations with MCA, straightforwardly welcoming Daenerys Entertainment and Panasonic to bid for his company together.
Simon, of course, would not immediately join the acquisition negotiations according to Wasserman's wishes, merely feigning interest and prevaricating.
At this moment, hearing the female assistant say this, Simon said, "Do you remember the plan America Online submitted a month ago, wanting to buy out the regional telecommunication network platforms of Bell Atlantic, Bell Pacific, and NYNEX to develop the internet?"
In the AT&T breakup, the former monopolistic Bell Telephone and Telegraph Company was split into the national AT&T, primarily focused on long-distance calls, and seven other regional telephone companies. The three companies Simon just mentioned happened to be three of the original Seven Baby Bells, and they were also the regional telecom companies in over a dozen states on the East and West Coasts where America Online planned to focus its business.
Currently, America Online's operations, apart from a small number of self-built network lines, largely rely on leasing the line network platforms of the traditional Bell System.
With a positive outlook on the internet industry's prospects, Steve Case submitted a proposal to Simon late last month, hoping to acquire the exclusive rights to internet access services from Bell Atlantic and the other two companies. This would involve signing an exclusive agreement by paying an annual fee to the three companies. This would not only prevent other internet service providers from entering America Online's business territory but also secure more support from the three operators in terms of internet access services.
If the heads of the three regional telecom companies could see the future like Simon, there would be no way they would agree to America Online's proposal.
It's important to know that once the 20-year exclusive contract proposed by Steve Case was signed, not only other internet service providers, but even the three telecom companies themselves, would not be able to independently operate ISP businesses.
However, the reality was that because the entire internet industry in the United States had just begun, and America Online only had over 100,000 users, such a number was completely insignificant in front of traditional telecom giants, not worth personally entering the market. If they could get an extra income by selling off the platform, why not?
Therefore, all three companies expressed interest in Steve Case's proposal.
However, after a month of back-and-forth on the specific terms of cooperation, an agreement has yet to be reached.
The three companies believe that since America Online wants to buy out their line network, they should pay based on the total number of users, rather than America Online's proposal of paying based on the specific number of internet access users.
America Online's proposal was willing to pay each of the three companies $20 per user annually. Based on America Online's total user base of 150,000 in August, the annual fee to be paid to the three companies would only be $3 million.
While $3 million isn't a huge sum, considering America Online's rapid user growth in recent months, in a year or two, as long as America Online's user base reaches the million-level, this figure would actually be quite substantial.
On the other hand, if the three companies' proposal were adopted, although they were willing to reduce the per-user fee to one-tenth of America Online's quoted price, which is two dollars, multiplied by the three companies' total user base of nearly 20 million across a dozen states on the East and West Coasts, America Online would have to pay a huge annual fee of $40 million from the start.
Moreover, the three companies also wanted to retain the right to renegotiate every two years during the contract period.
America Online's overall valuation was still less than $100 million when Westeros Corporation injected capital and took control some time ago. Clearly, the three companies dared to make such an exorbitant demand, undoubtedly because they saw Simon, the big financial backer, behind the scenes.
Why not fleece a fat sheep if it's there for the taking?
Not only that, considering Simon's own optimistic view of the internet industry, the three companies also demanded equity in America Online.
In Simon's view, if he could sign this exclusive agreement, even if he had to immediately shell out $40 million, he would be extremely happy. Once the internet industry started to boom, the three companies would definitely realize what a huge mistake they had made.
However, such thoughts could not be revealed, and Simon would certainly not agree to the three companies taking a stake in America Online.
As a result, this matter has been dragging on for a month, and there's still no resolution.
Jennifer clearly remembered this matter and nodded, saying, "I think if Bell Atlantic and the other two could lower the per-user quote to $1, paying based on the total number of users would be more cost-effective. However, what does this have to do with our acquisition of MCA?"
Simon said, "My previous plan was that once America Online grew to a certain scale and federal telecom regulations eased a bit, I would have America Online initiate acquisitions of these traditional operators. Triple play, remember I mentioned that idea?"
"The Telecommunications Act enacted during the AT&T breakup restricted long-distance phone companies, regional phone companies, and cable television companies from venturing into each other's territories. Getting the federal government to lift telecom regulations should be very difficult", the female assistant said expertly, then suddenly understood, saying, "You're planning to initiate acquisitions of traditional operators now?"
"Bingo", Simon tapped the porcelain plate lightly with his fork and said, "You can start collecting information on these three companies today when you go back, including their asset market value, operational status, management information, and industry-related legal documents. Also, remember to keep it confidential".
"I'll do it myself", the female assistant nodded, then said, "However, in that case, we might need to raise a very large sum of money. And, buying all three companies at once is impossible, so which one do you plan to choose?"
Simon blurted out, "Bell Atlantic".
For the current Westeros system, trying to acquire all three companies at once was impossible, both financially and legally.
Therefore, among the three companies, Simon's true target was actually Bell Atlantic.
Bell Atlantic was the predecessor of Verizon, which many years later became the second-largest telecom operator in the United States, second only to AT&T. Its business territory covered the densely populated eastern states of Pennsylvania, New Jersey, Washington D.C., and Virginia, with a regional population exceeding one-fifth of the United States.
Of course, Bell Atlantic also had the highest market value among the three companies.
Even against the backdrop of a continuously declining US stock market following the outbreak of the Gulf War, its market value still exceeded $5.6 billion as of last week's close.
Considering an acquisition premium of around 30%, Simon would need at least $8 billion to acquire Bell Atlantic. Including the $7 billion prepared for MCA, the total capital Simon would need to deploy this time would reach $15 billion, most of which would need to be obtained through loan financing.
The acquisition of RJR Nabisco, completed in early last year, has now, a year and a half later, turned into a complete disaster. After the US debt crisis erupted at the end of last year, there have been very few corporate mergers exceeding $1 billion in the past year.
Simon's planned large-scale, two-pronged acquisition, once news of it breaks, will undoubtedly ignite the entire country's media.
Speaking of which, if there were enough time, Simon would actually like to proceed step by step.
However, the current period is the most sluggish economic period of the 1990s in the United States. Once the UN forces swiftly resolve the Gulf War next year, the federal economy will quickly recover. By then, if Simon still wants to acquire Bell Atlantic, the cost might exceed tens of billions of dollars, and he might even face competing bidders.
Looking further ahead, if Simon waits until the peak of the new technology wave in the 1990s to push for America Online's expansion according to the original plan, by then, for large-scale mergers involving hundreds of billions of dollars, the governmental regulatory hurdles alone would be more than ten times greater than they are now.
Since many things have already changed, taking advantage of the current abundance of available funds to pre-emptively begin the Westeros system's expansion in the telecommunications sector is undoubtedly the best choice.