In a living room downstairs in the villa, Janette and Sophia Fessey discussed the business adjustment matters of Château Latour during this period, and then chatted casually about other topics. Janette inadvertently raised her wrist to look at her watch; the meeting between Simon and Raymond Smith had already lasted for an hour and forty minutes, far exceeding the original one-hour agreement.
Sophia also looked at her own watch, stood up and said, "It's already noon, I should head back".
Janette walked Sophia to the villa entrance, noticing her gaze inadvertently drifting toward the stairs. She smiled and said, "There are so many things going on lately. Simon has to fly back to Los Angeles this afternoon, so you might not see him this time".
Sophia rolled her eyes at Janette as if nothing was wrong: "Who said I wanted to see him?"
"Yeah, who said it?" Janette caught the bug in Sophia's sentence and teased, "I didn't say you wanted to see him".
Sophia's face immediately turned a bit red.
Although Simon had somewhat heartlessly warned her that day not to think about what she shouldn't, ever since they had shared intimacy, her attitude toward that young man had unknowingly undergone some changes.
At least, the pleasure of that afternoon was truly unforgettable to her.
After settling the children here, she had originally made up her mind to come and see them as long as she wasn't too busy on weekends. However, having just arrived this morning and hearing that Simon happened to be here, she couldn't help but run over under the pretext of discussing the operation of Château Latour with Janette after settling in for a bit.
Before coming, she couldn't help but change into an office lady suit that the young man liked very much and carefully applied makeup.
Then, she didn't see Simon, but Janette saw through her.
Almost fleeing under Janette's playful gaze, Sophia drove away from the manor, raising a hand to gently stroke her burning cheek. The scene of him roughly leaving many red marks on her body that day inexplicably lingered in her mind.
Oh god, I'm truly beyond help.
After Sophia left, Janette didn't go upstairs. She called the four girls, ABCD, to start preparing lunch. Raymond Smith was clearly going to stay for lunch today.
Inside the villa's study.
Raymond Smith had already notified his assistant to temporarily cancel this European trip, and he didn't even avoid Simon when making the call.
When he first heard Simon say that Westeros Company already held 4.9% of Bell Atlantic's shares and hoped to acquire the company entirely, Raymond Smith even thought the young man was joking.
The news that Daenerys Entertainment was about to compete with Matsushita to bid for MCA was almost common knowledge.
After confirming that Simon was not joking, Raymond Smith subconsciously asked if he planned to give up on MCA.
The answer surprised Smith even more.
Simon Westeros intended to launch two acquisition cases with a total value of over $10 billion simultaneously.
Raymond Smith subconsciously took Simon's offer as a traditional leveraged buyout and was almost about to refuse flatly. He didn't want Bell Atlantic to fall into a situation like Reynolds Nabisco or Time Warner after being acquired.
Once Simon roughly explained his acquisition intentions, Raymond Smith dropped the idea of an immediate refusal and began to ask about more specific acquisition matters.
Because of the very thorough preparations made in advance, driven by Simon's topics, the discussion between the two unknowingly became deeper and deeper. The topics involved the change in Bell Atlantic's business strategy after the acquisition, debt repayment models, the company's next steps for expansion, the Federal Government's policy direction for the telecommunications industry, and so on.
When the noon sunlight spilled onto the coffee table covered with various documents between the two, Raymond Smith realized that the time was close to 12 o'clock.
Simon didn't notice the time issue and continued, "Many times, listed companies have to give up many long-term plans in order to deal with the short-term returns that shareholders value. With Bell Atlantic privatized, these constraints will disappear, and we can very calmly place larger bets in the fields of mobile communications and internet business, which have great future development potential. As long as we accumulate enough advantages in advance, once the federal merger and acquisition controls on the telecommunications industry are relaxed again, Bell Atlantic can immediately carry out a wider range of expansion".
Raymond Smith was brought back into the topic by Simon's words and said, "Simon, the prospects for mobile communications are still very clear, but for the internet, how can you be sure you haven't placed the wrong bet? You should know that according to your ideas, the funds we need to invest in basic line upgrades alone will reach the billion-dollar level. Once the development of the internet industry does not meet expectations, what the company will face is not just financial losses, but potentially a matter of life and death".
"Ray, I've compiled a memorandum of various ideas about the internet industry before. If you're interested, you can take it back and have a look. I believe that an industry never exists from the start; it requires us to pioneer and create it ourselves. The global electronic information network has been sprouting since the sixties and has been brewing for more than twenty years. It has been widely used at levels such as military, commercial, scientific research, and government offices, which is enough to prove the development potential of the internet industry. Since the internet can be applied in so many professional fields, there is no reason why it cannot be promoted in the public sphere with even broader market potential".
Simon paused for a moment here and then quickly said, "Imagine, Ray, if one day, in addition to the news, forums, personal homepages, and email applications already provided by the Ygritte Portal people could also obtain movies, music, games, making friends, shopping, and countless other online services you can or cannot think of now through the internet, how much development potential would this industry have?"
Raymond Smith had also browsed and tried the online services provided by the Ygritte Portal. After thinking for a moment, he pointed to the pile of materials on the coffee table and asked, "Simon, aren't you afraid that I'll brush you aside and do it myself after you tell me these ideas? My control over Bell Atlantic isn't as bad as you think".
Simon shook his head and smiled, "That's because you haven't yet acted sufficiently against the will of the shareholders. In a company like Bell Atlantic, even if you have great power, it's impossible to do whatever you want. I believe there must be many executives within Bell Atlantic who want to take your place. As a listed company, as long as you encounter setbacks while pushing these strategies, even if only temporary, your so-called 'control' over Bell Atlantic will quickly fade. In comparison, as long as we can reach an agreement on the company's fundamental development direction, I can tolerate the management's long-term losses in a certain business, even for more than five years".
Raymond Smith fell silent for a moment.
The two had been discussing for more than an hour. Raymond Smith knew that if he hadn't been moved, he wouldn't have discussed it with Simon for so long, and would not have even cancelled his original itinerary.
It's just that accepting Westeros's acquisition offer has pros and cons after all.
On the positive side, just as the young man said, free from the strict regulatory shackles of a listed company, he could take some aggressive business strategies more boldly, and the company wouldn't have to rack its brains over financial reports every quarter.
However, on the negative side, as the Chairman and CEO of Bell Atlantic, he indeed has very great power now. As long as he doesn't undertake too risky reforms for the company, he can very securely stay in this high-paying position until retirement.
Conversely, once the company is acquired, he, who originally held great power, is equivalent to finding himself a boss. If the company's future development meets this young man's expectations, it's fine; if not, he could be kicked out at any time. Even if he could get a huge termination fee through a pre-arranged golden parachute contract, his career would basically be ruined.
After weighing it repeatedly for two or three minutes, Raymond Smith looked up again and said, "Simon, I need you to give more promises and guarantees".
"Ray, you must know Amy Pascal. As the CEO of Daenerys Entertainment, she will receive compensation of over $100 million this year. I believe this should be the highest compensation ever for a female executive. Many people within the Westeros System will also receive very generous rewards this year, so you don't need to worry at all that your efforts will not be rewarded".
Simon said this, then changed the subject and continued, "However, Ray, I also understand your other meaning. You need to still have enough power after I complete the acquisition of Bell Atlantic. Frankly speaking, I can't promise you anything. I've looked at your resume and am very sure you have the ability to run this company well, but I will definitely not let go completely. If you follow Hollywood, you'll know how ridiculous the two executives hired by Sony after acquiring Columbia are now. They are completely squandering and ruining this major studio at will. Before being hired, the two were actually very excellent producers. The reason for this situation is largely because their power lacked constraints. With such a case before me, I will definitely not make the same mistake".
Raymond Smith's expression was still somewhat hesitant.
Simon waited for a moment and then said, "Ray, I remember an anecdote about Apple circulating in Silicon Valley. When Steve Jobs invited Apple's current CEO, John Sculley, who was still working at Coca-Cola at the time, to join Apple, he asked him: Do you want to sell sugar water for the rest of your life, or seize the opportunity to change the world? Actually, I also want to say, Ray, do you want to stay in the position of helmsman of Bell Atlantic steadily until retirement, and then be quickly forgotten after a lively retirement party, or work with Simon Westeros to create a business miracle enough to be remembered by the world?"
Hearing Simon's words and thinking about the brilliance of the young man in front of him in just a few years, a long-lost surge of hot blood gradually rose in Raymond Smith's heart. After a brief final hesitation, he finally reached out his hand: "Simon, I'm in".
Simon and Raymond Smith shook hands firmly, and he finally breathed a sigh of relief.
Having settled Raymond Smith, there were no longer any major obstacles on the Bell Atlantic board of directors.
After having lunch together, Raymond Smith hurried back to Philadelphia, Pennsylvania, which is only a little over a hundred kilometres from New York and is where Bell Atlantic's headquarters is located. Smith also took with him a draft of Westeros Company's intent to acquire Bell Atlantic, mainly including some informal acquisition offers and breakup fee terms.
Simon initially gave an informal offer totalling $6.3 billion, which was a 10% premium compared to Bell Atlantic's average stock price over the previous three months.
Regarding the termination fee, the price Simon promised this time was 2% of the final transaction price.
Although he had agreed to Simon's acquisition offer, Raymond Smith quickly returned to his role during lunch, stating bluntly that Bell Atlantic's recent stock price had been seriously undervalued due to market conditions. Therefore, Simon must offer a sufficiently sincere price to move the many shareholders of Bell Atlantic.
However, because of Raymond Smith's cooperation, this acquisition has been confirmed as a friendly takeover, and the possibility of competitors appearing is very low. Coupled with the continuous sluggishness of Bell Atlantic's stock price in recent months, the original budget of $8 billion is definitely more than enough.
You should know that in a typical friendly takeover, the stock premium is basically within 20%.
Even considering the factor of Bell Atlantic's stock being undervalued due to the market downturn, according to Simon's original estimated 30% premium, Westeros Company's acquisition price would not exceed $7.5 billion. In fact, it is more likely to be around $7 billion.
However, Simon also promised in that letter of intent that in the future, not only would he not withdraw cash from Bell Atlantic to repay debts, but he would also continue to inject at least $1 billion in funds for the company's development.
Therefore, the overall budget for Bell Atlantic remains $8 billion.
After seeing off Raymond Smith, Simon also hurried back to Los Angeles.
After the final preparations on Sunday and Monday, on Tuesday, October 31, Daenerys Entertainment formally made a public offer to MCA.
$7 billion.
All at once.
Matsushita had already given an acquisition offer of $6.6 billion. If Daenerys Entertainment increased it by one or two hundred million, it would only seem very insincere, so Simon simply gave his upper limit for the offer.
Countless people had waited for a long time, and finally, the cards were on the table.
As North American media reported Daenerys Entertainment's move one after another, MCA's stock price rose sharply again. By the close of Tuesday afternoon, MCA's market value was close to the overall $7 billion offer given by Daenerys Entertainment.
Matsushita has accumulated more than $12 billion in cash reserves overseas over the years, and Simon Westeros's personal cash assets have also reached $8 billion. Both can be called powerful.
Therefore, many people have already begun to look forward to the arrival of a bidding war.
On the other side, after several consecutive intensive consultations by the board of directors, Bell Atlantic responded to Simon's acquisition offer on November 1, agreeing to start formal acquisition negotiations with Westeros Company.
James Raybould personally led the team to start consultations with Bell Atlantic's management.
Because very sufficient preparations had been made in the early stages, the Westeros Company acquisition team only needed to re-confirm the business operations and assets and liabilities of Bell Atlantic that they already understood, and then quickly focus the negotiations on specific acquisition details.
At the same time, the acquisition team also began to secretly contact and lobby Bell Atlantic's shareholders.
As a listed company with a long history before the split, after the 1984 spin-off, Bell Atlantic's equity was still very dispersed. Most of the shares were held by many pension funds and insurance funds across North America, and few shareholders held more than 5%, which to a large extent increased the difficulty for Westeros Company to acquire Bell Atlantic.