Chapter 389: Rinto's Offer
Li Tang had invested in Brazil's GX Oil Company, becoming its Vice President in charge of exploration!
As soon as this news was announced, it created enormous waves throughout the energy industry.
Mineral resources and energy resources differed significantly, and moreover, the newly discovered oilfield in Brazil, potentially containing eight billion barrels of oil, was offshore!
This project was drastically different from any project Li Tang had previously participated in or invested in. One could even say he had crossed over into a completely new industry.
Magnesium Country.
Headquarters of Magnesium-Aluminum Group.
CEO Alan faced the assembled senior management.
"We've spent over two years preparing and working hard on this. I appreciate everyone's dedication during this period," Alan spoke solemnly.
His words carried some weight. For two full years, apart from their business departments, the entire group—including administrative and support departments—had cooperated tirelessly, working day and night solely to successfully acquire Gala Aluminum Group.
After his opening remarks, he quickly got to the point: "Gala Aluminum's board continues to reject our goodwill, claiming our bids are always too low. However, the aluminum industry has grown too quickly in recent years. Prices for bauxite, alumina, primary aluminum, and aluminum products have all skyrocketed. I worry the economic outlook may deteriorate. We know every industry has its ups and downs, so our bids cannot be reckless. Yet, we also cannot abandon our attempt to acquire Gala Aluminum. Successfully merging and integrating Gala will elevate our company's overall scale significantly!"
Everyone knew that even after acquiring Gala Aluminum and integrating smoothly, it wouldn't result in a qualitative transformation. This merger would simply combine two large aluminum corporations, eliminating redundant departments and personnel, reducing costs, and sharing sales channels—nothing more dramatic.
However, the importance of this acquisition was understood by all, and they wouldn't give up easily.
"The acquisition of Gala Aluminum is vital for us!" The head of marketing spoke out, "Currently, over 60% of our business is concentrated in Magnesium Country. Globally, we have too little presence. We've invested heavily worldwide in new projects over recent years, yet the returns have been minimal. Speaking frankly, Gala Aluminum virtually monopolizes high-end aluminum products in the European market. Meanwhile, in the world's new largest aluminum market—Huaxia—Hua Aluminum Group dominates alumina, primary aluminum, and aluminum products due to their home advantage, making it difficult for us to compete."
Alan nodded in agreement.
"Acquiring Gala Aluminum essentially secures the entire European market and expands our market share in Huaxia as well!"
"Indeed, Gala Aluminum has shifted its growth focus from Europe to Huaxia, achieving some success."
"With Gala Aluminum's global factories and offices worldwide, their market is truly expansive."
"I've heard that Huaxia's Li Tang, invited by Richard, recently invested over three billion magnesium dollars in Gala Aluminum. If Li Tang helps Gala Aluminum expand into Huaxia, successfully acquiring Gala would also open the door to the world's largest market for us, perhaps securing even greater market share!"
"Li Tang currently holds almost 13% of Gala Aluminum's stock!"
"Could Li Tang intervene in the merger?"
"His current holdings are still below the threshold for a mandatory takeover."
"But his holdings are dangerously close to the critical 14% mark!"
After this was mentioned, everyone fell silent. Clearly, they realized something unusual: Li Tang, from Huaxia, might hold the deciding vote in this crucial merger affecting the global aluminum industry.
"Can we contact Li Tang?" Alan asked his assistant.
"We cannot reach Li Tang directly. However, representatives from Li Tang Shengshi Holdings and Lianying Mining informed us their boss is currently in Brazil and unavailable for a meeting soon," the assistant quickly replied.
"What's he doing in Brazil? I don't recall him having projects there," Alan was puzzled.
"Latest reports say Li Tang invested in Batista's GX Oil Company, serving as Vice President responsible for exploration and technology!"
"He's investing in the energy sector?"
"Oil is extremely complicated—behind every successful oil company, there's typically a national government!"
"Huaxia desperately needs oil. If Li Tang's investment in Brazil succeeds again, it confirms he's no ordinary businessman and likely has special backing."
"He carries out national interests, investing globally in minerals and energy resources."
"And he's consistently successful, never failing!"
"Even with a country's backing, achieving what he has is exceptional. Particularly in mining resources, he's charted a unique path."
"If he disrupts the oil industry too, soon the entire global resources industry might depend on him!"
"But I believe this news benefits us. If Li Tang invests in oil—an expensive and demanding venture—he'll have less inclination to intervene in Gala Aluminum's acquisition."
This tangent briefly lightened the atmosphere, sparking casual conversations.
Alan, however, wasn't interested in chatting, raising a hand to settle everyone down. "Regardless of Li Tang's intentions, our acquisition of Gala Aluminum must continue. Gala Aluminum was historically part of Magnesium-Aluminum Group. Our domestic antitrust officials assure us that if Gala's board consents, regulatory approval won't be an issue."
"What budget did our board approve?" someone asked.
"Thirty-three billion magnesium dollars," the CFO replied, "in a combined payment of cash and equity swaps."
"Gala Aluminum's current share price is around 76 magnesium dollars, meaning our offer carries a 14% premium. This gives us a real chance."
"Gala's stock price at 76 magnesium dollars is inflated. Realistically, their stock should be around fifty."
"Gala's board repeatedly says our offers are low, but they haven't considered the real economic value!"
At meetings, people tended to speak actively but often drifted off-topic.
Alan finally asked, "Any further opinions? If not, this will be our final bid to Gala Aluminum!"
…
Gala Aluminum Group's Board of Directors.
Meetings had become frequent recently.
The Ontario Teachers' Retirement Fund had always been Gala's largest shareholder, holding a permanent board seat. Although Li Tang recently overtook this position by holding the largest stake, he had no board seat, leaving the retirement fund still influential.
Wiggins personally attended today's critical meeting concerning Gala's future.
"GX Oil Company just announced Li Tang's investment of a hundred million magnesium dollars, naming him Vice President!" he announced with a smile.
"Your retirement fund invested in GX Oil too?" someone asked.
"We invested fifty million magnesium dollars—not much. Brazil's economy is showing promise; you all should pay attention," Wiggins crossed his arms. "I didn't expect Li Tang to invest seriously when he mentioned it casually at our cocktail party. Don't underestimate this Huaxia man—he truly has exceptional investment instincts."
"Who would dare underestimate Li Tang now?"
"He's practically dominating the global mining market!"
"Maybe not domination yet, but if he continues his rapid and steady development, his future influence is immeasurable."
"Now he's entering the oil industry. This Huaxia guy truly has guts and capability!"
"How much of Gala Aluminum's stock does Li Tang hold now?" someone asked abruptly.
Richard sat in the middle, quietly preparing his statement and possible debate strategies. Hearing the question, he looked up and answered solemnly, "He controls approximately 12.8% directly, with convertible bonds equating roughly to another 0.5%."
"13.3% already!"
"If he increases holdings to 14%, even without a board seat, he can directly influence the merger!"
"Rejecting Li Tang's board seat previously was the correct decision! He obviously has ulterior motives!"
"We must stop him from acquiring more shares!"
At this last naïve suggestion, Richard shook his head slightly. "We can't influence shareholders worldwide. However, with the merger at a critical juncture, most shareholders expect an acquisition premium and won't sell their shares now."
"Indeed, Li Tang's stock holdings haven't significantly changed recently. Small numbers circulating won't affect the situation."
"He can't increase holdings unless someone willingly transfers shares."
"I've contacted shareholders owning more than 1%. None will transfer shares to Li Tang. I urge board members to safeguard your shares and inform us before selling to Li Tang."
"Nobody will sell at this critical moment."
"Whoever does is a fool."
"Indeed, Rinto, BHP, and Saltwater Sea Valley officially joined the acquisition race, submitting bids."
"Honestly, while reluctant to sell Gala, a suitable offer would be acceptable."
"I trust Rinto, BHP, and Saltwater Sea Valley more than Magnesium-Aluminum."
"The iron ore business is highly profitable!"
By now, the directors had ceased worrying about Li Tang's shares. With no one transferring stocks, Li Tang's path was effectively blocked.
"At least we don't currently worry about Li Tang interfering," Richard concluded. Seeing preparations completed, he proceeded formally.
"Thus far, five companies have officially submitted bids: BHP, Rinto, Saltwater Sea Valley, Magnesium-Aluminum, and Stranta."
"I'm eager to hear Magnesium-Aluminum's offer," Richard looked expectantly.
"33 billion magnesium dollars, cash and equity combined," Evans replied.
"As expected," Richard nodded. "Alan finally learned not to underbid."
"What about BHP?" another asked curiously.
"34 billion magnesium dollars in cash, though installment payments stretch over five years."
"And Saltwater Sea Valley?"
"32.5 billion magnesium dollars, all cash!" Evans added, mentioning, "Stranta bid only 29 billion, matching current market prices. Too low to consider."
"No reason to consider Stranta's offer."
"If we accepted that, Magnesium-Aluminum's previous bid would've sufficed."
"And Rinto's offer?" someone urged.
Evans paused dramatically, exchanged glances with Richard, and announced solemnly after receiving approval, "Rinto bids 38.1 billion magnesium dollars—all cash!"
"38.1 billion?"
"All cash?"
"No mistake?"
"That's about 101 magnesium dollars per share!"
"Massive premium."
"Far exceeds other offers!"
"Clearly, Rinto understands what we want most!"
Excited, everyone broke into delighted smiles.
"What reason could we have to reject such an offer?" Wiggins immediately declared support.
"Richard, inform shareholders immediately to accept Rinto's bid swiftly before they reconsider!"
"Indeed, let's finalize this quickly!"
Richard nodded, calling for a vote: "Those favoring Rinto's offer, please raise your hand."
All hands rose instantly, some raising both hands.
Excluding recent speculation-driven peaks, Gala's historic maximum was around 61 magnesium dollars per share. Rinto's offer exceeded Gala's true value by over 66%!
Unsurprisingly, the board eagerly and unanimously supported Rinto's lucrative offer.
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