They should have slept at night, but it was still daytime in the United States, and Zhou Buqi was very energetic. This made Han Yan and Chen Yan suffer, and various tricks came alternately.

In the middle of the night, Zhou Buqi let them go, put on his pajamas and left the bedroom. He found Sun Wanran and Ning Lu watching a movie in the living room, and they didn't feel sleepy at all.

"Has the specific news from MGM come through?"

"Well, here we are! It's in the study room!"

Sun Wanran and Ning Lu got up together and followed him to the study.

This is Teacher Han’s large flat floor. The area is not as big as the Zhou family’s villa, so you have to run upstairs and downstairs. Just around the corner, Sun Wanran said softly: “It’s true, Warner offers 1.5 billion US dollars to acquire MGM.

Includes $3.7 billion in debt."

Zhou Buqi twitched the corner of his mouth, "The price is too low! It's strange that others can sell it!"

Sit down and look at the materials.

Ning Lu has sorted out some documents and translated them into Chinese. Zhou Buqi can also read English materials, but it is still easier to read them in Chinese, with ten lines at a glance.

It turns out that this is related to last year’s subprime mortgage crisis!

Last year, the subprime mortgage crisis broke out, which had a serious impact on the banking industry. Many large banks went bankrupt due to broken capital chains, runs, or were packaged and sold.

In order to withdraw funds and survive the crisis, many banks have to sell financial assets at low prices to survive!

For example, last year Zhou Buqi and Xu Baihui launched a wave of "platter investment" business in Hollywood. In fact, they bought their movie platter shares from major financial institutions at low prices.

Banks and financial institutions received cash, and Jieyu Media received shares, including classic film series such as "Avatar," "Fast and Furious," and "The Twilight Saga."

So did MGM's creditors.

Last year, two hedge funds bought all of MGM's debt at 50 to 60 cents per dollar of debt, spending a total of $1.7 billion. The reason for making this investment was because they concluded that MGM

If you can't pay your debts, you will go bankrupt.

Once MGM goes bankrupt and reorganizes, it must use a debt-for-equity swap model to convince creditors.

At that time, MGM's existing shareholders will be deprived of all their shares, and creditors will own 100% of MGM. In other words, they only need to spend US$1.7 billion to own the Sony consortium 4 years ago.

The veteran Hollywood giant spent a total of US$4.8 billion to complete the acquisition.

This level of bargain hunting is much better than Zhou Buqi.

Zhou Buqi was a prophet, and he really relied on his keen insight into the capital world to complete the bargain-hunting harvest. Zhou Buqi called an investment consultant named Ericla who was responsible for capital operations and said

this matter.

He feels like he has a good chance!

These two hedge funds were betting that shareholders would give up on MGM and would no longer inject capital or assume debt for MGM, causing MGM to go bankrupt.

If someone takes action at this time to help MGM survive the bankruptcy crisis, then the hedge funds' calculations will be in vain. I'm afraid it will be difficult to resell the US$37 billion in debt, and they will only be able to collect approximately US$250 million from MGM every year.

of interest.

This way of making money by slowly collecting interest is obviously not what hedge funds like.

At that time, Zhou Buqi will have the opportunity to package up the debt in their hands at a price far lower than US$3.7 billion. Taking over MGM's debt is equivalent to owning MGM.

Sure enough, Erica confirmed this idea. Next, it depends on whether MGM's shareholders are willing to continue to contribute money to help MGM tide over the difficulties.

If they are willing to pay, there is nothing anyone can do about it. They are the actual accusers of MGM.

But with the current economic situation, it's impossible for them to pay.

MGM was already insolvent.

This is a bottomless pit.

Erica continued: "Now, MGM has received a total of two acquisition bids, one from Time Warner, they invested US$1.5 billion, and one from Lionsgate Pictures, they invested US$1.8 billion."

Zhou Buqi asked: "Why is the price so low?"

Ericla smiled and said: "Actually, it depends on the coordination between equity parties and creditors. For example, Time Warner invested US$1.5 billion. The specific operation process is to acquire all the shares from MGM shareholders at a price of 0 yuan.

Buy it, and then buy the debt from creditors for US$1.5 billion. If it really goes to bankruptcy and liquidation, an additional US$200-300 million may be wasted on asset restructuring, which will cause huge waste.

.”

Zhou Buqi said with a smile: "They spent 1.7 billion US dollars to buy the debt, and they are waiting to make a big profit. Time Warner wants to buy it for 1.5 billion US dollars? Bargaining other people's bargains? You really know how to think!"

I was really amused.

This is already the second time.

The last time it was EMI Records.

The creditor of EMI Records is Citibank. There has been news before that Time Warner will invest in buying Citigroup's debt, and then wait for EMI to go bankrupt, thereby achieving control of EMI Records and completing an ultra-low-price acquisition.

If done, this will become a very classic case of capital operation.

But here comes the question, why should Warner?

Is it too much to think about using capital operations from Citigroup and hedge funds to suck their blood?

In comparison, Lionsgate's offer is quite realistic.

1.8 billion US dollars.

Others bought the debt for US$1.7 billion last year, and Lionsgate took over it for US$1.8 billion, leaving a profit margin of US$100 million...

It's so ridiculous.

I don’t know if the people in Hollywood are smart or stupid. They are a little too self-sufficient. They want to cut off the leeks of capital from Wall Street and steal the bottom line of capital.

For Zhou Buqi, he felt at ease.

It is impossible for MGM and creditors to accept the offers offered by Warner and Lionsgate.

Zhou Buqi asked: "When can our acquisition plan be produced?"

Eric La said: "The team is working hard to make further statistics and evaluations on MGM's finances, and strive to report the plan to you within a week."

Zhou Buqi asked again: "What is the current financial situation of MGM? Has it been found out?"

Ericla smiled and said: "Well, I just learned that it is very serious! Very serious! Just this morning, MGM held an emergency meeting of creditors. They have to repay US$250 million in debt interest this year, and they are still short of US$150 million.

Funds used to support film production

plan, they can no longer even come up with the US$20 million needed for short-term capital turnover. It is said that they intend to borrow another US$300 million in debt, pushing the debt to US$4 billion, to tide over the current crisis first and allow a longer period of time.

Complete the sale or reorganization of the company."

Zhou Buqi frowned, "We must find a way to stop them!"

Ericla was stunned for a moment, "How to stop it?"

Zhou Buqi was very decisive, "It's already this time, why are we still making movies? All MGM's production plans have been suspended! Then, we will pay US$20 million in advance to help them survive the current crisis."

"Advance payment?"

“Compensation provisions with regulatory scrutiny.”

"this……"

Ericla was shocked and very surprised.

Acquiring a large company like MGM requires review by regulatory authorities. During this process, the acquirer and the acquired party will sign a compensation agreement.

If the transaction is not approved by the regulatory authorities and the acquisition fails, the acquirer will have to pay a compensation of about 2% of the total transaction amount as compensation to the acquired party.

In other words, if MSI acquires MGM for a total price of US$2 billion, it may have to sign a compensation clause worth US$40 million.

If the acquisition fails due to lack of regulatory approval, MGM will be compensated US$40 million.

This is a common practice in capital operations.

But the problem is...

At present, Eric La's team has not yet fully understood MGM's financial situation and debt situation. It will take nearly a week to sort out all the rules and regulations.

If you don't even know the financial situation of the acquired company, how can you do this transaction? The more detailed the due diligence, the smaller the risk. What if there are some financial minefields hidden in MGM? What if?

If it was not discovered before the acquisition, it would be a disaster!

Just like when many state-owned enterprises go for overseas acquisitions, after the acquisition is completed, they are horrified to discover various minefields and get tricked again and again. In name, the transaction fails, but in fact it is a loss of state-owned assets.

Ericla was a little uneasy, "Isn't this... this is a bit hasty?"

"No matter what, we must buy MGM! There are two ways to go together. Pay the advance payment first, and don't let MGM borrow any more debt. It's too messy. We must also try to complete the due diligence as soon as possible. There are so many people in the advisory team

Hollywood veterans, I believe MGM doesn’t dare to lay a trap against them. Just do it!”

Zhou Buqi had the foresight to know that there was no minefield at MGM.

In its previous life, MGM successfully went bankrupt and reorganized a year later. Then it filmed "007" and "The Hobbit" and turned around in one fell swoop until it was acquired by Amazon for $8.5 billion ten years later.

Today, MGM is considered by the industry to be worth no more than US$2 billion and has room for four times its growth.

This is still the achievement of the previous life.

If Zhou Buqi takes charge of MGM, he feels that he can run MGM better!

At least the development of the "Hobbit" series was so stupid that it made a lot of money, but most of the profits fell into Warner's pockets. This is not okay!
To be continued...