Chapter 200 If Force Doesn't Work, Try Softness!
Whether Nobby Jamieson believed it or not, at this point, digging into whether Lin Haoran had orchestrated everything was meaningless.
Even if Lin Haoran had set a trap, what could they do?
To a certain extent, this was also a normal part of business competition.
In commercial warfare, there were always winners—and there were always losers.
"Mr. Lin, let's talk about China Gas Company," Jamieson said, sitting down across from Lin Haoran.
At this point, there was no choice but to accept reality.
Would Lin Haoran be willing to hand China Gas Company back to Jardines Matheson?
That was wishful thinking. Such a high-quality company—one even Jardines Matheson was willing to pay a premium to acquire—would not be easily relinquished by anyone.
Li Mingze had only sold because he couldn't compete. Otherwise, he would never have sold to Lin Haoran.
Now, Jamieson's focus was how to retreat gracefully.
Holding 40.7% of the shares without any control?
That was unacceptable.
It would just tie up a massive amount of Jardines Matheson and Hongkong Land's capital.
While China Gas was highly profitable, under Hong Kong Electric's control, who knew how profits would be managed?
Not everyone ran their companies like Li Mingze did, distributing profits regularly.
Over the past month, Jardines Matheson and Hongkong Land had poured over HK$200 million into this acquisition.
Adding the cost of shares they already held from earlier investments, the total was well over HK$300 million.
They could not afford to have such a large sum frozen indefinitely.
Thus, Jamieson needed to turn their shares back into cash quickly and invest elsewhere—or acquire other companies they could actually control.
"Mr. Jamieson, what are your thoughts? Please speak freely," Lin Haoran said with a smile.
"I hope Mr. Lin will buy the China Gas Company shares held by Jardines Matheson and Hongkong Land at the current market price," Jamieson said directly.
Since they had no way of taking control, Jamieson believed they should decisively retreat.
"I'm sorry, Mr. Jamieson, but I already control enough shares. I don't think I need to acquire any more," Lin Haoran said, shaking his head.
"Mr. Lin, I must remind you that your current holdings already exceed 50%, triggering Hong Kong's Takeovers and Mergers Code. This obligates you to make a full mandatory offer. Although you have spread the shares across several companies, you are the ultimate controlling party.
If no one complains, perhaps the Hong Kong Securities and Futures Commission would turn a blind eye. But if we formally request an investigation, Mr. Lin will still be required to acquire our shares," Jamieson said bluntly.
Jamieson had considered offloading the shares slowly through the stock market.
However, given the current situation—where Hong Kong Electric and Jardines Matheson controlled over 90% combined—there were very few shares left in circulation.
If they tried to sell even slightly larger amounts, it would be immediately obvious.
The result would be a collapse in the share price.
And with 40.7% to sell, it would take years.
Thus, the best strategy was to pressure Lin Haoran into buying them out.
Finding another buyer? Impossible—unless they accepted massive losses.
Thus, their only hope was to force Lin Haoran—the actual controller—to buy their shares.
Lin Haoran hadn't expected Jamieson to push so hard. He had initially thought splitting the shares among three companies would avoid such problems.
But now he realized he had been a little naive.
He still remembered how, during the Cheung Chau Cement acquisition battle, the Securities and Futures Commission had openly favored the British shareholders.
Now, even if everything seemed legitimate, the authorities would undoubtedly side with Jardines Matheson.
However, forcing him into a bad deal wouldn't be easy.
Buying at current market prices? Jamieson was dreaming.
The HK$800 million valuation of China Gas was artificially inflated—pushed up by Jardines Matheson to secure control.
Before the New Year, China Gas's market cap had been less than HK$590 million.
Letting himself be ripped off now? Impossible!
"I'm sorry, Mr. Jamieson, but I think you may be disappointed.
Although Mr. Li Mingze and I have signed share transfer agreements, our transaction has not yet completed. The funds haven't been transferred yet, nor have the share certificates been handed over.
If you feel this arrangement is improper, it's simple—I'll renegotiate with Mr. Li. I'll amend the contracts so that my holdings drop back to 49.9%. I'm sure Mr. Li, with his long association with China Gas, would be happy to retain a small stake as a memento," Lin Haoran said calmly, smiling.
Last night, after signing the agreements, they had agreed that the transfer of funds and share certificates would be completed today.
Thus, until that step was finished, the deal was not technically complete.
Facing an old fox like Jamieson, Lin Haoran remained unfazed. He was ready to counter every move.
Now, he would see what Jamieson could come up with next.
Lin Haoran's words made Nobby Jamieson frown deeply. This unexpected change had completely caught him off guard.
Clearly, the attempt to pressure Lin Haoran into forcibly buying their shares had failed.
Thus, Jamieson decided to change tactics. Since hard methods didn't work, he would try soft ones.
"Mr. Lin, Jardines Matheson and Hong Kong Electric Group have enjoyed a good relationship over the years. We've often cooperated—like five years ago, when we jointly attempted to acquire China Gas Company. Although that effort failed, it proved our longstanding friendly ties.
Just last month, our Hongkong Land even reached a strategic cooperation agreement with Hong Kong Electric Group. We have always been excellent partners.
In the competition for China Gas Company, you have ultimately won. On behalf of Jardines Matheson, I congratulate you.
China Gas Company is an outstanding public utility enterprise. Most importantly, it holds a monopoly position. Unlike Hong Kong Electric, which still has to compete with CLP Holdings, China Gas has no rivals in the Hong Kong market.
Its extensive gas pipeline network throughout Hong Kong virtually ensures no new competitor could ever emerge. This monopoly is why we at Jardines Matheson were determined to acquire it—stable and generous returns that are rare even in Hong Kong.
Think about it: if you fully privatize it, all the profits of China Gas Company would be yours alone. Owning China Gas would be like owning a gold mine, constantly producing gold for you," Jamieson continued.
What he said was true. Since China Gas's early days, its network of gas pipelines and gas lamps had quickly spread across Victoria City, now Central and Western District.
By 1892, their services had expanded to the Kowloon Peninsula.
Today, China Gas's pipelines covered all major areas of Hong Kong, including the newly developed towns.
It was virtually irreplaceable. Thousands of kilometers of gas pipelines made it impossible for any competitor to rise.
Thus, its monopoly would only continue to strengthen.
Especially after the 1970s, with Hong Kong's population boom and rapid economic growth, the piped gas business flourished. China Gas became a real "golden goose" in the eyes of major financial groups.
For example, last year, China Gas's net profit exceeded HK$70 million—pure profit, not just revenue.
With Hong Kong's population still growing, the number of new customers would continue increasing, boosting both revenues and profits year after year.
While its total profits were still behind Hong Kong Electric's, in terms of profit-to-market-cap ratio, China Gas was even better.
Years ago, it was this attractiveness that led Jardines Matheson and Hong Kong Electric to attempt a hostile takeover—which only failed due to fierce resistance from Li Mingze and other Chinese businessmen.
Yet, China Gas's value kept Jardines Matheson obsessed, culminating in this latest "Dawn Raid."
However, once again, they had failed.
Lin Haoran knew China Gas's strengths well.
Privatizing it wasn't out of the question—but certainly not at the current inflated market price.
And definitely not paying HK$800 million for it. If Jardines Matheson wanted to sell, they were welcome to sell elsewhere.
"Mr. Jamieson, if you're willing to sell your shares to me for HK$200 million, I don't mind acquiring them," Lin Haoran said with a smile.
At HK$200 million for 40.7% of the company, that would value China Gas at roughly HK$500 million—close to its pre-New Year valuation.
Of course, this would mean a huge loss for Jardines Matheson and Hongkong Land.
After all, they had invested over HK$200 million just for 30% of the shares, not even counting earlier investments.
Selling all 40.7% for only HK$200 million? Impossible.
They would lose tens of millions at least—something unacceptable.
Fortunately for Jardines Matheson, Jamieson had involved Hongkong Land in the acquisition, spreading the losses. Otherwise, if Jardines Matheson had absorbed all the shares alone, their shareholders would have caused a major uproar.
"Two hundred million? That's impossible!" Jamieson rejected without even thinking.
He couldn't personally make such a decision. Even as the head of Jardines Matheson, he couldn't bear that responsibility.
"In that case, let's not discuss it further for now. You're aware that the current high price of China Gas shares is entirely due to Jardines Matheson's own efforts to push it up. If I bought at that price, I would be the fool.
For me, gaining control of China Gas is already a great success. As for privatization—honestly, I hadn't even considered it before," Lin Haoran said with a relaxed smile.
With his current cash reserves, privatizing China Gas wouldn't be difficult.
The only question was whether it was worth it.
Jamieson understood that persuading Lin Haoran today was impossible. He would have to go back and discuss it with Jardines Matheson's think tank and board members.
"In that case, I'll take my leave for now. Let's talk again later," Jamieson said, already tired of the conversation.
"Mr. Jamieson, are you not staying for the board meeting? As a major shareholder, you could still hold an important position within China Gas. I propose appointing you as Chairman of the Supervisory Board. What do you think?" Lin Haoran said with a smile.
"No need. Let's discuss that later. Mr. Lin, I'll be leaving now," Jamieson replied, walking out of the room without looking back.
What a joke.
He had come here dreaming of being Chairman of the Board, perhaps at least Vice Chairman if things went badly.
Being made a mere supervisor? That was an insult.
Of course, he refused.
(This chapter ends.)
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