After a moment of hesitation, Lew Wasserman said, "Simon, completely waiving the termination fee is impossible, and the board won't agree. However, we can discuss the specific amount carefully".
Simon did not intend to waste too much time on this matter, saying, "Then let's make it $50 million, a fixed figure".
$50 million is a huge sum, unattainable for most ordinary people, but for the current Simon, this money is insignificant.
The termination fee negotiated between MCA and Matsushita is 2.5% of the final transaction amount. Based on MCA's recent market value of nearly $6 billion, if Matsushita abandons the acquisition, they would have to pay an termination fee of $150 million, roughly equivalent to half a year's net profit for MCA.
Wasserman had originally considered setting Daenerys Entertainment's termination fee between 1% and 2%, which was already a huge concession. Hearing that Simon was only willing to offer a fixed fee of $50 million, he shook his head and said, "Simon, that number is too low".
Simon insisted, "You want me to get involved in this matter quickly, Lew, and this is the price that must be paid".
Wasserman thought again and said, "Then, the matter must be made public in advance".
Simon shook his head: "No. After signing the letter of intent, Daenerys Entertainment will initiate a feasibility study for the acquisition of MCA, but will not immediately start the acquisition".
The corner of Wasserman's mouth twitched. A feasibility study? Who would believe that Daenerys Entertainment hadn't even completed this preliminary work yet?
However, everyone understood this was just an excuse, so Wasserman didn't argue.
The two continued to haggle for a moment, and Simon reluctantly raised the termination fee to $60 million, roughly equivalent to 1% of MCA's current market value. Daenerys Entertainment would sign a letter of intent with MCA within a week to investigate and evaluate the feasibility of acquiring MCA, and MCA would need to cooperate by actively providing necessary internal asset and financial data.
At the same time, although this matter needed to be kept confidential from the outside world, MCA could inform Matsushita of the news that Daenerys Entertainment was formally participating in the bidding.
After personally seeing Simon off, Wasserman returned to the office. MCA President Sid Sheinberg was already there. Seeing Wasserman nod, Sheinberg knew Simon had confirmed his entry into the game and asked, "Lew, did you discuss the issue of company management rights with Westeros?"
Lew Wasserman finally expressed his intention to retire after suffering a major illness three years ago, which is why he agreed to sell the company he had controlled for decades.
However, power is something that the deeper one is immersed in, the harder it is to let go of.
Over the years, as his physical condition improved again, Wasserman's thoughts of retirement gradually faded. Among the acquisition terms discussed between Matsushita and MCA, maintaining the control of the company by the existing management team was a very important one.
Compared to Lew Wasserman, who is 77 this year, Sid Sheinberg, who is only 55 and in his prime, is even more reluctant to give up his power.
Lew Wasserman shook his head, sat down slowly behind his desk, and said, "A friend of mine in Washington called me yesterday morning, saying that Ovitz and his people are networking and trying to block Daenerys Entertainment's acquisition of MCA. I personally asked Ovitz this morning, and he admitted it".
Ronald Reagan was an artist signed under MCA in his early years, so Wasserman actually has good connections in political circles.
Sid Sheinberg was somewhat surprised by this news, momentarily forgetting his previous question, and subconsciously said, "We cannot let Ovitz sabotage this acquisition".
"Of course", Wasserman motioned for Sheinberg to sit opposite him, saying, "I have already warned him. However, if I had to choose between Matsushita and Daenerys, I would still prefer to sell MCA to Matsushita. Do you know why?"
Sid Sheinberg pulled up a chair and sat opposite Wasserman. After thinking for a moment, he quickly nodded: "If the company is acquired by Daenerys Entertainment, Westeros likely won't let us continue to run MCA".
"Not likely, but definitely not", Wasserman said. "Once Westeros gets MCA, he will certainly integrate Daenerys and MCA. Many of our company's businesses happen to complement Daenerys'. Westeros has built a very good management team in recent years, and he absolutely won't keep us around then".
Sid Sheinberg quickly understood Wasserman's line of thought.
Wasserman urging Daenerys Entertainment to join the bidding could force Matsushita to raise its offer.
Then, Ovitz would make a move at the appropriate time to squeeze Daenerys Entertainment out, allowing MCA to be successfully sold to Matsushita. Although the shareholders would change, MCA would remain under the control of the current management team.
Seeing the look of realization on Sid Sheinberg's face, Wasserman added solemnly, "Moreover, Hollywood has always been ours, after all. Westeros is just an outsider, no matter what. I don't believe the other major players would completely give up on preventing Daenerys Entertainment's continued expansion just for the sake of profit from one or two films".
Simon Westeros happens to be a person whose background is unclear and origins are unknown. Although there was a surname before Westeros that could indicate his lineage, no one knows if that is true or false, so no one knows his actual real background.
In Western countries, which are traditionally conservative at their core, this issue is highly valued among different groups of people.
The unconfirmed rumours that a certain US President must be related, to a greater or lesser extent, to the British Royal Family by blood, are the best proof of this point.
Simon Westeros's rise has been blindingly fast, but this time, with the MCA acquisition, probably no one will be slow enough not to react.
Those who are not of our kind are sure to be of a different mind.
Sid Sheinberg didn't feel there was anything wrong with Wasserman's words and pressed, "Lew, what exactly is Ovitz planning to do?"
...Simon did not know Lew Wasserman's intentions. Returning to Daenerys Studios, he instructed Amy and others to formally begin contact with MCA.
Signing the letter of intent as soon as possible would not only confirm the $60 million termination fee but also allow them to formally request internal corporate assets and financial data from MCA that were previously unavailable, facilitating appropriate adjustments to the originally drafted acquisition plan by the acquisition team.
After concluding the meeting with Amy and the others, Simon returned to his office, followed by the Female Assistant holding a document.
"This is the information sent from New York regarding David Meros's proposal to restrict overseas companies from acquiring American assets. They will formally submit it to Congress next week. Also, we have helped contact three media outlets; The New York Times, Los Angeles Times, and The Washington Post and they will simultaneously follow up and report on this proposal".
Simon took the folder from the Female Assistant's hand, sat behind his desk, and looked down to flip through it.
David Meros is the US Congressman Simon met at the Hearst Family party last time.
Although the parting with the Hearst Family was unpleasant, and Simon didn't believe David Meros's proposal would gain Congressional support, Simon still instructed James Raybould afterward to contact him, and had the Sharp Consulting Company, funded by Westeros Company, simultaneously follow up on the matter, actively helping David Meros build momentum.
As long as it could put some pressure on Matsushita's acquisition of MCA, it would be worth it.
Furthermore, through this cooperation, Daenerys Entertainment could successfully establish contact with the Congressman named David Meros. Connections are always accumulated little by little through mutual interaction.
Because they had made ample preparations for the MCA acquisition, Daenerys Entertainment quietly signed the letter of intent with MCA over just the weekend.
Although MCA did not secretly leak the matter to the media this time, influenced by Daenerys Entertainment's formal entry into the bidding, Matsushita withdrew a quotation plan from last week and restarted negotiations with MCA.
Due to this change, the MCA acquisition case was destined to drag on until at least the end of October before a result emerged, which was exactly what Simon wanted.
Having settled this matter, Simon flew to Melbourne as planned on the new Monday, October 15th.
For several consecutive days, Simon stayed with Jan de Bont and others at the filming base in the western suburbs of Melbourne, an area that was originally an abandoned factory but now showed the prototype of a film studio. Although he was very satisfied with most of the samples filmed by De Bont, since he was not personally directing, Simon still found many shots that needed reshooting, some due to technical reasons, and others because he was not satisfied with the visual effect.
However, the reshooting work did not start immediately, but was scheduled for three months later, in January of next year.
By then, the rough cut and special effects shots of 'Batman: The Dark Knight' would basically be completed, allowing for more precise confirmation of reshoot details to save budget.
Due to the great success of the first film, the budget for 'The Dark Knight' was virtually unlimited if needed, but Simon always paid close attention to this issue. Thanks to strict and meticulous preliminary planning, even accounting for approximately two weeks of reshoots, the project's final budget could be controlled within the planned $80 million.
While Simon was in Melbourne, Matsushita, after an emergency deliberation, submitted another offer to MCA, raising the overall acquisition price to $6.5 billion, which was already comparable to the transaction price Simon remembered.
Perhaps because the news of Daenerys Entertainment's formal entry into the bidding inevitably leaked, MCA's stock price saw another significant rise this week.
According to this trend, it was only a matter of time before MCA's market value exceeded Simon's planned maximum bid of $7 billion.
The only thing worth celebrating was that, compared to Columbia Pictures' massive debt of over a billion US dollars, MCA, which had always been in excellent operating condition, had a negligible debt ratio. Although debt was inevitable, it was basically operational liabilities such as short-term accounts payable and notes, without large bank loans.
The Johnston Family mansion in the suburbs of Melbourne.
The time was Saturday, October 20th. Simon was returning to Los Angeles tomorrow, so he specifically came here today to have dinner with everyone. Due to some matters in North America, Janette did not come to Australia with Simon this time.
It was still a big family gathering: the Anthony Johnston family, the Norman Johnston family, and the youngest of the Johnston Family, Patrick Johnston, who recently became officially engaged under the Old Man's urging, along with Sarah Keyston. Veronica naturally rushed over too.
After dinner, Simon, the Old Man, the eldest, and the second eldest came to the study. Patrick felt that since he was a Johnston Family man, he should also have the right to listen in, but before he could finish his joke, he turned into a quail after receiving a glare from the Old Man.
"Simultaneously launching acquisitions of two companies might avoid some market frenzy, but Simon, have you considered the subsequent financial pressure? I mean, not just future repayment pressure, but also the capital required for the further development of the two companies themselves, especially Bell Atlantic. If the telecom industry wants to expand, the investment is always enormous. Even though it is only a regional telecom company, if you want to develop emerging Internet access services, the infrastructure investment alone would likely be calculated in the billions of dollars?"
In the study, Raymond Johnston clearly knew all about Simon's recent movements, and his first question was distinctly sceptical.
Simon had naturally considered these issues.
Given the current accumulation of the Westeros System, relying on Daenerys Entertainment's profits over the next few years, the planned sale of some tech stock assets, and the cash flow of the two major target companies themselves after the acquisitions are complete, supporting debt repayment over the next three to five years is not an issue.
Looking further ahead, the US economy will recover after the Gulf War next year. The various other assets held by the Westeros System will rapidly appreciate in value over the next few years.
As he recalled, in 1995, the market capitalization of both Microsoft and Intel would reach around $50 billion.
With the Westeros System holding 20% and 15% stakes in Microsoft and Intel, respectively, the value of these stocks alone is projected to reach $17.5 billion by then. If necessary, Simon could completely alleviate his financial pressure by cashing out a portion of these assets.
The Old Man's brow furrowed tighter. He said, "It's truly foolish to pin your hopes on the US economy improving. Bush is not a president who cares about the domestic economy; he is currently planning to drag the US into another war. Go check the status of the US economy during the Vietnam War. If he successfully gets re-elected next, the US economic situation will only continue to worsen; it's impossible for it to improve".