vstars Chapter 90 North American Expansion
Chapter 90 North American Expansion
February 8, 2004, Los Angeles.
Fu Yibai arrived at Los Angeles International Airport at 2 p.m. local time.
Stepping out of the terminal, a wave of heat hits you. Unlike the dryness of early summer in Beijing, the sunlight here is more direct, with the intensity unique to the other side of the Pacific Ocean.
The person who picked me up at the airport was a Chinese man in his early thirties, wearing a dark blue suit, with his hair neatly combed back and a professional smile on his face.
"Mr. Fu, welcome to Los Angeles."
He stepped forward and took Fu Yibai's suitcase.
"I am Lin Rui, an investment banking advisor recommended by Goldman Sachs. I will be accompanying you to handle matters here this week."
Fu Yibai nodded and followed him toward the parking lot.
"How's the contact with Franchise Pictures going?"
"We've already had initial contact."
Lin Rui opened the back door and waited for Fu Yibai to get in before walking back to the driver's seat.
"Charter Studios is in a really bad financial situation right now, with debts exceeding $80 million and cash flow almost completely depleted."
Their shareholders have lost confidence, and if a suitable offer comes along, the acquisition won't face much resistance.
The car drove away from the airport and merged into the traffic.
Lin Rui continued, "However, Mr. Fu, I need to remind you that the most valuable assets of Licensed Films are the two hundred screen cinemas and the distribution network."
However, the cinema's facilities are severely outdated, with many pieces of equipment dating back to the early 1990s. A significant amount of money may be needed to upgrade them after the acquisition.
"I know."
"How much should I negotiate the price down?"
Lin Rui pondered for a moment.
"If it's a cash acquisition, we should be able to get it for between 35 and 40 million US dollars."
If the price were any lower, the shareholders would rather go bankrupt and be liquidated than accept it.
"Then prepare forty million."
Fu Yibai spoke in a flat tone.
Lin Rui glanced at him in the rearview mirror, then hesitated, as if he wanted to say something but didn't.
He had handled many cross-border mergers and acquisitions, but it was rare to see someone like this young man who could casually spend tens of millions of dollars.
The hotel was the Four Seasons Hotel in Beverly Hills. Fu Yibai checked in at 4 p.m.
After a short rest, Lin Rui took him to meet their first target – a Chinese investment manager on Wall Street.
7 p.m., a private club in downtown Los Angeles.
The private room wasn't large, but it was elegantly decorated, and you could see the Los Angeles night view through the floor-to-ceiling windows.
Sitting opposite me was a middle-aged man in his early forties, with a square face, thick eyebrows, and shrewd but not overly sharp eyes.
His name is Chen Zheng. He graduated from Tsinghua University and has an MBA from Columbia University. He worked at Goldman Sachs for eight years and just switched to a mid-sized hedge fund as a partner last year.
"Mr. Fu, I've heard so much about you."
Chen Zheng stood up and shook hands with a moderate pressure.
"Lin Rui told me that an investor from China wanted to meet with me, but I didn't expect it to be you."
"Does Mr. Chen know me?"
Fu Yibai sat down opposite him, and the waiter brought over two glasses of whiskey.
"A director who won the Berlin Golden Bear, a rising star in the domestic film industry, how could I not know him?"
Chen Zheng smiled.
"But to be honest, I didn't expect you to want to invest in the United States."
Fu Yibai picked up his wine glass and took a sip, without beating around the bush.
"I have two things to do in the United States this time."
First, acquire a nearly bankrupt independent film production and distribution company, Franchise Pictures.
Secondly, I need a professional investment team to manage my overseas assets.
Chen Zheng raised an eyebrow.
Franchise Studios?
I've heard that it's poorly managed and on the verge of collapse.
Is Mr. Fu looking to buy at the bottom?
"I guess so."
Fu Yibai put down his wine glass.
"I need someone who understands the US market and capital operations to help me build a framework for overseas investment."
If Mr. Chen is willing, compensation is not an issue.
Chen Zheng remained silent for a few seconds.
He sized up the young man in front of him.
At the age of 24, he had already achieved great success in the country, but he extended his reach to the other side of the ocean.
And judging from this, it's not a small-scale operation; they're going to pour real money into it.
"Mr. Fu, would you mind disclosing how many assets you have overseas that you need to manage?"
"1.1 billion".
Fu Yibai spoke calmly.
US dollars.
Chen Zheng's pupils contracted slightly.
He picked up his glass, took a sip, and suppressed his shock.
1.1 billion US dollars.
Even among the major clients he dealt with at Goldman Sachs, it was rare to see someone come up with this level of cash.
The young man in front of me spoke casually, as if he were talking about today's weather.
"Mr. Fu, may I ask a question?"
The source of this funding...
All I can tell you is that it's legal.
You don't need to know anything else.
Fu Yibai interrupted him, looking him directly in the eye.
"Now, I need your answer."
Chen Zheng took a deep breath and put down his wine glass.
"Mr. Fu, I need to think about it for a few days."
"Can."
Fu Yibai stood up and extended his hand.
"I'd like to hear your decision in three days."
Fu Yibai's schedule was packed for the next few days.
On July 9th, in the morning, we visited the headquarters of Franchise Films and several cinemas.
In the afternoon, I met with the interim CEO of Franchise Films for the first round of preliminary discussions.
On July 10, he met privately with several major shareholders of Franchise Films to test the bottom line.
On July 11, the law firm that Lin Rui contacted initiated due diligence.