Chapter 769: Launching a takeover

"Mr. Barnes, GEICO's stock is not for sale in our company. I am very optimistic about its future, which is why I have been increasing my holdings over the past four years. So I'm sorry, I won't sell, so you've made a wasted trip.'

Warren Buffett, Chairman of the Board of Berkshire Hathaway, looked across the table at a manager from the M&A department of Merrill Lynch and, with a serious expression, rejected him with a sense of urgency.

Before coming, Barnes had prepared himself with the relevant information, so he knew that Buffett was right: Berkshire Hathaway had been increasing its holdings of GEICO stock.

However, he scoffed at Buffett's remark that it was not for sale, believing that it was a prelude to a price hike.

He has been in the financial industry for decades and has long since seen Wall Street for what it is. Here, there is no such thing as non-sale items. If you have US dollars, you can buy whatever you want here.

If you can't buy it, there is only one possibility – you don't have enough US dollars!

Barn smiled and said, 'Mr. Buffett, before coming here, I have already made the relevant preparations, so I think we should be honest with each other. GEICO seems to be improving at the moment, but there are too many unknown risks. It is precisely because of this that our bank, Merrill Lynch, has lowered its rating.'

'Berkshire Hathaway's current shareholding ratio is a bit awkward, and your strength is not enough to swallow it. It is better to withdraw in time than to get into a battle.'

'Berkshire Hathaway's revenue was high last year, but if it gets bogged down in the battle for GEICO, it will be detrimental to your company.'

Buffett's face did not change, but his heart sank. From Barnes' words, he heard some underlying meaning.

Is this a threat?

Frowning, he said tentatively, 'Mr. Barnes, I remember that Merrill Lynch is the third largest shareholder of GEICO. Can I know who you sold your shares to? Who is behind the acquisition?'

Buffett was not sure if it was Merrill Lynch itself that was making the acquisition, so this was just his probing question.

Although Barnes had said that Merrill Lynch had lowered its valuation of GEICO, it could not be ruled out that Merrill Lynch itself was suppressing the market value of GEICO.

Barnes was certainly not stupid enough to let Buffett figure out the truth. He smiled and said, 'Mr Buffett, I am only responsible for the acquisition, I don't care about other things, I just need to do my own job well.'

'Mr Buffett, for the 27.3% stake held by Berkshire Hathaway, we are willing to pay $57 million. With this money, you will have more funds to invest in more valuable companies.'

Buffett did not get the information he wanted, and he was full of doubts. He simply ignored Barnes's offer and politely declined, saying, 'Mr. Barnes, I understand what you mean. I personally am not willing to sell GEICO's shares, and GEICO's shares are an important investment project for our company. If we want to sell them, we also need to obtain the approval of the board of directors. For the time being, I cannot give you any answer.'

Barnes also knew that it was impossible to reach a deal on the first visit. As long as Buffett and the board of directors of Berkshire Hathaway were considering the matter, then his purpose for today had been achieved.

However, he would not let Buffett drag this on forever. Their bank, Merrill Lynch, had the authority and strength to set the rules.

Therefore, he nodded with a smile, 'Okay, then I won't disturb you anymore. I look forward to your reply, and I will visit again tomorrow!'

Buffett's face twitched, suppressing the displeasure in his heart, and he forced a smile and said, 'Okay, please!'

After seeing Barn out the door, Buffett returned to his office, sat down on the sofa, and, with a frown, pondered Barn's intentions and motives.

Just then, a subordinate hurried in, startling Buffett.

'Chairman, I have a special situation to report to you!'

The subordinate said, standing solemnly in front of Buffett.

Seeing the subordinate's solemn expression, Buffett, who was already in a heavy mood, had a bad feeling rise in his heart again. He took a deep breath and said sternly, 'What is it?'

The subordinate immediately replied, 'The company's stock analysis department has found that our company's stock price is now fluctuating abnormally, and the trading volume is increasing significantly, with no signs of stopping or decreasing.'

Buffett trembled, immediately got up and commanded, 'Follow me.'

After saying that, Buffett hurriedly went with his subordinate to find out the situation.

Soon, he knew that his subordinate had not lied to him.

He suppressed the thoughts that kept rising, picked up the phone and made a few calls in a row. After hanging up the phone, his expression was solemn.

His friend, who worked at the New York Stock Exchange, had confirmed with him that a large number of Berkshire Hathaway shares were being traded, and buy orders were being placed continuously. The largest buyer was a company called Polaris Capital, but the specific information was unclear.

Xia Yu had not intended to hide this operation, so the acquirer was clearly displayed as Polaris Capital.

'Polaris Capital...'

Warren Buffett muttered to himself, his brow furrowed, but he couldn't recall any relevant information, and it felt very unfamiliar.

Merrill Lynch had just come to buy GEICO's shares, and now there was a Polaris Capital Company popping up to buy their company's shares.

The motives of the former and the latter were unclear.

His intuition told him that there should be some connection between the two, otherwise it would be impossible for such a coincidence to happen!

But anyway, he knew that the company was in trouble and it had to be solved now.

And the acquisition of shares by Polaris Capital is even more urgent. He can't sleep or eat until the situation is sorted out.

Thinking about this, he immediately instructed his subordinates to use all their resources to find out more about Polaris Capital, while raising funds and preparing for contingencies.

Then, he asked his secretary to notify the other directors and immediately call a board meeting.

...

'Boss, here is the list of shares currently acquired.'

Polaris Capital, Xia Yu arrived at the office of the special working group and took the list submitted by Xia Yu to read it.

It clearly listed the stock acquisition process for the two targets, including information such as the time, trading partner, and transaction price, as well as a summary of the information.

Xia Yu scanned the specific acquisition process and skipped it, looking directly at the final statistics.

GEICO's equity was already 18.7%, of which Merrill Lynch alone contributed 12%, accounting for nearly two-thirds.

In addition, an investment institution that originally held 5.2% of the shares and had a seat on the board of directors at GEICO also sold all of its shares directly to Polaris Capital.

The remaining 1.5% of the shares were all acquired by sweeping the market.

GEICO has been in decline for four years, and although it has improved somewhat, it is still difficult to change its image as a junk stock over the past few years. Investors' patience has long been exhausted, so after the order was placed, there were countless takers.

Now, the company is still trying to win over a few major shareholders. If it succeeds, it will easily overtake Berkshire Hathaway and become the second largest shareholder, even surpassing the original largest shareholder.

As for Berkshire Hathaway, thanks to its good performance last year, the capital market has high expectations for it, and ordinary investors are also relatively optimistic about its future, so the takeover is even more difficult.

At present, it has not acquired any major shareholders, but only 1.7% of the shares held by a financial institution, and then acquired some shares on the market, which together account for 2.6%.

However, Xia Yu is already quite satisfied with this result. Peter Lynch deserves a lot of the credit for this result achieved in just a few days. He has worked at Fidelity for such a long time that he has accumulated a very extensive network of contacts, which came in very handy now.

After putting the list away, Xia Yu once again reminded and encouraged the subordinates of the acquisition team, then looked at the time and went to prepare for the interview.

Wall Street is the place with the most financial elites. Polaris Capital will play an extremely important role in the field of acquisitions in the future. The company urgently needs a large number of talents, and the talent pool at the branch is currently seriously lacking, so it has been recruiting externally. At the same time, Xia Yu also commissioned the New York branch of Korn Ferry to be responsible for headhunting and recommendations.

Peter Lynch is running around for several acquisitions, so naturally he has to come in person for the interview.