Chapter 542: Launching the Acquisition

In the following days, Xia Yu took some time to visit Rongye Trading Co., Ltd. After observing the company, he found that Ye Huanrong was indeed a person who could become the richest Chinese in the UK in the future. Under his management, Rongye Trading was developing at a rapid pace.

After the inspection, and at Ye Huanrong's repeated requests, Xia Yu combined his understanding of Rongye Trading's current situation and provided many forward-looking suggestions. Ye Huanrong immediately promised to implement them diligently.

Xia Yu believed that if Ye Huanrong truly followed the directions given, Rongye Trading's growth speed would definitely reach a new level!

Meanwhile, the acquisition of *The Daily Telegraph* was finally completed. Purchasing the newspaper, with a daily circulation of 1.6 million copies, for £13 million was, in Xia Yu's view, a bargain!

Converted to Hong Kong dollars, it was just over 110 million. To put things in perspective, the *Ming Pao* newspaper, with a daily circulation of only around 100,000 copies, was worth over 10 million Hong Kong dollars. Given that *The Daily Telegraph* had a daily circulation more than ten times that of *Ming Pao*, its actual value was even higher. Yet, the purchase price was less than ten times that of *Ming Pao*.

One could only say that the current media downturn in Europe was indeed a great opportunity for bargain hunting. If the media industry erupted in the 1980s, £13 million would be insufficient even if £30 million were offered!

This deal was a win!

If not for other factors and obstacles that needed consideration, Xia Yu would have seized the opportunity to acquire all major British newspapers and become a media tycoon in the UK!

However, that was just a thought. In reality, it was impossible.

With the acquisition of *The Daily Telegraph* completed, Xia Yu also had George Berkeley calm the management team and then brought the company's general manager to the Guangming Fund. After a detailed discussion, the general manager returned to manage the newspaper with peace of mind.

On another front, the acquisition team for Rolls-Royce had been assembled, and the acquisition strategy and plan were completed.

For the acquisition consultant, considering Rolls-Royce's special background, the acquisition team analyzed the options and ultimately chose Lloyds Bank, one of the four major private banks in the UK, as the acquisition advisor.

Initially, there were two choices: HSBC Holdings and Lloyds Bank. Both banks were controlled by Britain's ancient families, with extensive networks covering the entire UK.

Although Lloyds Bank was ranked last among the top four private banks in the UK, and was not as formidable as HSBC Holdings, HSBC Holdings had a less favorable background compared to Lloyds Bank.

The key reason was that Xia Yu learned from Elena that the Howard family was one of Lloyds Bank's major shareholders, holding one of the top three stakes.

Given that the Duke of Howard family did not hold the largest share, it indicated that the political influence behind Lloyds Bank was significant.

Now that Lloyds Bank was somewhat underperforming, it would be more dedicated to the Guangming Fund's acquisition of Rolls-Royce. Not only could this increase revenue, but it could also showcase strength to the outside world, attracting more business.

Besides confirming Lloyds Bank as the acquisition consultant, in order to increase the success rate, legal and tax advisors were also hired from the largest public accounting firm in the UK.

With the acquisition team and the two major consultants, a large and luxurious acquisition team was formed, reflecting Xia Yu's firm determination.

Once everything was prepared, Xia Yu gave the order, and George Berkeley sent the first acquisition offer to Rolls-Royce Group, formally proposing to acquire Rolls-Royce Motor Cars.

Caught off guard, Rolls-Royce Group was stunned. The group's CEO, Frank Richard, being an old hand in the industry, immediately rejected the Guangming Fund's initial offer and instructed to investigate the Guangming Fund's background and the acquisition team's situation.

As Rolls-Royce Group had the background of the UK's defense equipment department, investigating information in the UK was quite easy. Besides, apart from the offshore handling of equity, only a small portion of Xia Yu's shares were exposed. Other information was clearly available, but not widely publicized, making it difficult for the general public to know. However, for those with the capability to investigate, the information was straightforward.

Soon, a series of Guangming Fund's information was on Frank Richard's desk.

Frank Richard, an elite hired by the UK's Defense Equipment Group to serve as Rolls-Royce Group's CEO, was an engineer by training. He was proficient in management and had considerable expertise in engines, which helped in running the company better.

In 1971, Rolls-Royce Group began developing the unique three-rotor RB211 engine. Due to the novelty of the three-rotor technology and the inadequate performance of Rolls-Royce Group's composite fan technology, the RB211 engine project's development cycle was prolonged. This ultimately led to Rolls-Royce Group's financial resources being insufficient to support it, forcing the UK government to nationalize the company and transfer it to the UK's Defense Equipment Group.

Frank Richard was recruited by the UK government during this crisis to manage the situation, and he did not disappoint the government.

With government intervention, Rolls-Royce Group was successfully split into two companies: Rolls-Royce Motor Cars and Rolls-Royce Aerospace. This allowed Rolls-Royce Aerospace to regain vitality.

However, unfortunately, after being reorganized for six or seven years, Rolls-Royce Motor Cars remained in a poor state, seriously dragging down the group. Frank Richard had exhausted all methods and ultimately had to give up on it, though he remained committed to the successful operation of the vital aerospace engine division, which maintained the government's trust.

In fact, he had considered selling Rolls-Royce Motor Cars to lighten the burden on the group and focus entirely on the aerospace engine sector. However, due to the UK's economic downturn and the heavy investment required in the automotive industry, Rolls-Royce Motor Cars was mired in difficulties, and no one was interested. Thus, he had no choice but to let it be.

When Guangming Fund sent the acquisition offer, Frank Richard was actually pleased. However, he was unaware of Guangming Fund's full situation and knew that the initial offer was definitely the lowest. Even if he were to sell the company, he wanted a high price, so he decisively rejected the initial offer and began a psychological battle.

After reviewing the information, Frank Richard furrowed his brow and looked troubled.

The materials indicated that Guangming Fund had been offshore and was superficially represented by a Chinese from Hong Kong, holding a 20% stake. Analysis suggested that Guangming Fund might be wholly owned by this individual, but it could also be that he was merely a superficial agent.

This unknown background, or the partially exposed Hong Kong Chinese background, caused Frank Richard to feel uneasy.

Even though he had already given up on Rolls-Royce Motor Cars, he knew that whether the company was sold or not, he only had the advisory role. The decision was in the hands of the UK Defense Equipment Group and the UK government.

Given the pride of those officials, making them sell one of Britain's proudest companies to a person from a colony was a huge challenge!

Frank Richard sighed inwardly and continued reading.

Upon seeing that the acquisition consultants were Lloyds Bank and the legal and tax advisors were a British public accounting firm, Frank Richard's eyes lit up. He couldn't help but exclaim, "They've chosen two good consultants. If Lloyds Bank can fully cooperate, the probability of success should be quite high."

"Wait a minute!"

"One of the core members of the acquisition team, Elena Howard, is actually the daughter of Duke Carter Howard?!"

Seeing this information, Frank Richard was initially shocked and then furrowed his brows in deep thought.

Elena Howard was the daughter of Duke Carter Howard and joined Guangming Fund before graduating from university, not joining the family business for training. Instead, she joined this company. What was the reason behind this?

A flash of insight crossed Frank Richard's mind as he quickly flipped back to the earlier part and saw Guangming Fund's unknown background. An idea popped into his head: "Could it be that the Duke of Carter Howard is behind Guangming Fund?"

"But that doesn't seem right. If Duke Carter Howard wanted to acquire Rolls-Royce Motor Cars, his family business could handle it. As long as the price is right, I believe the government would definitely welcome it. There's no need to go through so much trouble and add unnecessary complications!"

Frank Richard furrowed his brows, unable to make sense of it, and his head started to ache. He decided not to dwell on it any longer.

"Whatever. This problem should be left to higher authorities. If Guangming Fund is truly backed by Duke Carter Howard, they will definitely work to establish relations with the government."

"If they don't establish relations, it means they are not!"

"No matter what, even though I want to offload this burden, I only have advisory power."

"If Rolls-Royce Motor Cars is indeed sold in the end, my responsibility is to sell the company at the highest possible price to secure more funds for the aerospace division!"

With this in mind, Frank Richard immediately organized the materials and reported them to the UK Defense Equipment Group.

Soon, the UK Defense Equipment Group issued orders to Frank Richard to temporarily hold off and deal with Guangming Fund according to the situation.

Frank Richard understood this order, so when Guangming Fund made their second offer, he did not refuse again but chose to engage in negotiations.

However, in the face of Guangming Fund's acquisition team, Frank Richard was as slippery as an old loach, maintaining a vague attitude, which left George Berkeley and others disappointed.

Faced with this situation, George Berkeley, along with the two major consultants, held an internal analysis meeting.

After the meeting, Lloyds Bank immediately mobilized their connections to understand the specific situation and prepared to persuade accordingly.