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Chapter 986 A Clever Move Backfires: The Squid Consortium Did a Huge Help to Lin Haoran!

Lin Haoran was awakened by a ringing bell.

It was already light outside the window, but the sun hadn't fully risen yet. I glanced at the clock on the wall; it was around 7 a.m. Pacific Time.

After becoming the owner of the MGM Grand Hotel, he moved into the hotel's most luxurious and largest presidential suite, just like he was living in his own home.

Liu Xiaoli, who was fast asleep on the Simmons bed, frowned slightly, then went back to sleep.

Lin Haoran yawned, got out of bed, picked up his mobile phone from the bedside table, walked out of the bedroom, went to the study, and answered the call.

The call was from John Reed.

Las Vegas is three hours behind New York. One uses Pacific Time, and the other uses Eastern Time. So, although it is still very early, around 7 a.m. in Las Vegas, it is already 10 a.m. in New York.

“Lin, I’m sorry to disturb your sweet dreams, but there’s something important I have to tell you, and you need to be careful!” John Reed said seriously on the other end of the phone.

Upon hearing this, Lin Haoran asked somewhat uncertainly, "John, is it about MGM?"

“Yes, it’s related to MGM, and to you. We’ve noticed that many media outlets across the United States are currently smearing your acquisition of MGM.” John Reed’s voice carried an unusual seriousness, which instantly sobered Lin Haoran up.

He walked to the window, drew back the curtains, and looked out at the desert that was gradually being illuminated by the morning light.

"John, speak slowly."

"In the latest edition of the newspapers this morning, we noticed that more than 80 media outlets across the United States are simultaneously hyping up your acquisition of MGM, with a very unified tone, questioning your motives, smearing your background, and inciting xenophobic sentiments."

This is not a normal news report; it is a coordinated operation behind the scenes, with highly professional methods, precise timing, and wide coverage, spanning from California to New York, from Florida to Washington State, encompassing almost all major markets.

However, only a few of these media outlets are large media outlets, and these media outlets are mainly concentrated in California, including the Los Angeles Times, The Hollywood Reporter, Variety, and the California Journal of the Arts. The other media outlets are basically small and medium-sized media outlets.

I then used Citibank's intelligence channels to investigate and discovered that this matter was very likely related to those Hollywood film studios. It seems that those Hollywood film studios are determined to give you a hard time.

“Lin, this is not a simple media storm. There is organization, coordination, and resources behind it, which means they were prepared in advance and it was not a spur-of-the-moment decision. You need to be careful; they may have other plans,” John Reed said solemnly.

Upon hearing this, Lin Haoran immediately realized the seriousness of the matter.

He already had a very clear understanding of the specifics of the eight major Hollywood studios through information provided by Citibank when he wanted to acquire a film company.

Before his acquisition of MGM, among the eight major Hollywood film studios, only Columbia Pictures was acquired by Coca-Cola the previous year, becoming the only film company at the time not controlled by a Jewish conglomerate.

The other seven companies are all controlled by the Squid Man.

This is a complex and deeply entrenched power network that permeates every corner of Hollywood, from production to distribution, from talent agencies to unions, from the media to award organizations—it's virtually everywhere.

Kirk Kecorian may be a squid, but he has no interest in the film industry. Instead, he has been deeply involved in his hotel and casino business in Las Vegas, so he probably doesn't fit in with other Hollywood squid conglomerates.

what does this mean?

This means that two of the eight major Hollywood film studios have broken free from the control of the Squid Consortium.

Columbia was acquired by Coca-Cola, and MGM was bought by them.

Although Coca-Cola is an American company, it doesn't belong to that circle, and Lin Haoran is a complete outsider.

The Hollywood squid community is facing unprecedented challenges.

"Exclusionary?" Lin Haoran had a guess.

John Reed's voice continued on the other end of the phone: "Many Americans are now outraged by your acquisition of MGM."

Those media outlets are deliberately inciting xenophobia, portraying you as an invader and a foreign plunderer. Lin, you should be prepared that this matter will not subside quickly.

I've already mobilized Citibank's intelligence department to conduct an in-depth investigation into this matter. I'll notify you immediately if I find any further leads!

"Okay, I understand, John, thank you!" Lin Haoran said gratefully.

This matter had nothing to do with Citibank, yet John Reed was so eager to help him, even mobilizing the intelligence department to investigate. Lin Haoran remembered this kindness.

“Lin, we are the best allies. Your business is my business. Besides, you are also an important shareholder of Citibank, aren’t you?” John Reed said with a smile.

"Of course, we are the best allies!" Lin Haoran laughed heartily.

This is also why he invested in Citigroup and even tried to become an executive director of Citigroup.

With Citibank, the world's largest commercial bank, as his backer in the United States, he can feel much more at ease investing here.

It was evident during this period that Citibank had provided him with a great deal of assistance.

If it weren't for this connection, his investments in the United States wouldn't have gone so smoothly.

This is the advantage of having a powerful backer.

As of now, Citigroup has not merged with Travellers Group, so it is not yet controlled by the Squid Group.

Neither John Reed nor Chairman Walter Riston were squidmen, and in fact, there were very few squidmen among the entire Citigroup board of directors.

This is why Citigroup now maintains a relatively neutral stance on Wall Street, unlike investment banks such as Goldman Sachs, Lehman Brothers, and Morgan Stanley, which are firmly controlled by the squid conglomerate.

This was also a key reason why Lin Haoran chose to invest in Citibank instead of other investment banks. He wanted a powerful backer who could rival the Squid Consortium, not another puppet controlled by the Squid.

"Lin, should we ask Citibank to intervene? I can discuss this with Mr. Walter. As long as the board approves, we can publicly support you."

"If Citibank intervenes, there's still a chance for you to reach a settlement with those Hollywood companies. Otherwise, if they continue like this, you'll find it impossible to make any progress in Hollywood!" John Reed asked.

Lin Haoran thought for a moment and said, "No rush. If we really need to use Citibank, I will personally contact Mr. Walter!"

“Actually, this isn’t all bad for you!” John Reed suddenly laughed.

"Oh? Why?" Lin Haoran asked, puzzled.

"Within an hour of my arrival at the company, four institutions that hold shares in MGM Grand Hotel or MGM Studios have contacted me saying they are willing to sell their shares to me, whereas these four institutions were previously unwilling to sell."

In addition, after the market opened at 9:30 a.m. New York time, the stock prices of MGM Grand Hotel and MGM Studios continued to decline.

Before I called you, the data I had was that both companies had fallen by more than 2% in the first half hour of trading, which greatly facilitated our acquisition of shares in the two companies through the secondary market.

Originally, after the shareholders learned that you were going to privatize these two companies, many shareholders were waiting for you to offer a premium to buy their shares.

During this period, we have been negotiating with those holding institutions and have not yet taken action in the secondary market.

But now, with those negative reports coming out, market sentiment has instantly reversed.

Shareholders began to panic, worried that the privatization plan would be shelved due to this public pressure, and that MGM's future would be further bleak because of this negative news.

So they started selling off their stocks, fearing they'd be stuck with them and unable to sell them.

The rules for US and Hong Kong stocks are different. In Hong Kong, since the Wharf Holdings takeover battle, a new shareholder with 35% ownership must make a mandatory offer to all shareholders, and with more than 90% ownership, they can forcibly acquire the remaining shares.

In the United States, however, the rules for privatization are completely different.

There is no mandatory tender offer requirement; more often than not, the approach is a "one-step" agreement or tender offer.

The acquiring party can quietly purchase 50%, 70%, or even 89% without actively making an offer; it is entirely voluntary. Unlike in Hong Kong, there is no rule requiring the highest price in the past six months to be used for the acquisition.

This is the free market, where any economic activity can be carried out freely as long as it does not violate the law.

The original intention of this system was to protect market vitality, but in the hands of those with ulterior motives, it can also become a sharp weapon.

This is why there are often people in the United States who, when no one is paying attention, gradually acquire shares of a target company, and by the time the target company realizes what's happening, it's too late.

Regardless of the path taken, stock price fluctuations directly impact the cost and pace of privatization.

The lower the stock price, the lower the cost for Lin Haoran to acquire shares in the secondary market, and the less he will need to pay when launching a full takeover bid in the future. Wall Street calls this "public opinion discount"—market sentiment is dampened by negative reports, causing the stock price to fall, but the company's fundamentals remain unchanged.

Entering the market at this point is equivalent to buying the same asset at a discounted price.

And the ones creating this negative sentiment are none other than those Hollywood squid people.

They intended to use a propaganda war to damage Lin Haoran's reputation, but inadvertently helped him reduce the cost of privatization.

How ironic.

Upon hearing this, Lin Haoran laughed and said, "This is indeed a good thing. My primary goal right now is to privatize MGM Grand Hotel and MGM Studios. Since these Hollywood giants are helping me out, I'll gladly accept their help."

John, could you please have your Citibank team take this opportunity to quietly acquire shares of these two companies on the secondary market? Don't make a big fuss, don't attract market attention, just take them little by little.

I will also have my Global Investment Company secretly acquire the shares. You two can cooperate to accelerate the privatization process.

We don't know how long the panic in the public opinion will last. Once the market reacts, the stock price will rebound. We need to acquire as many cheap shares as possible before that happens.

John Reed chuckled softly on the other end of the phone and said, "Lin, you really exemplify the word 'profiteering' to the extreme. Those squid people are desperately trying to smear you, but you turn around and use the panic they create to reduce your own privatization costs."

By the time they realize what's happening, you've already bought up enough shares on the secondary market. They won't be able to stop you, and those institutions, barring unforeseen circumstances, will also be worried; none of them will likely want to continue holding shares.

"This isn't taking advantage of someone's misfortune; it's going with the flow. They want to use a propaganda war to attack me, and I'm just taking advantage of the situation. It's not like I asked them to do it!" Lin Haoran laughed.

John Reed continued, "Lin, don't worry, I'll have the acquisition team take this opportunity to increase their shareholding."

To be honest, these Hollywood giants really did you a big favor. Without their propaganda war, we estimate it would have taken at least seven months to completely privatize these two companies.

But now, the sudden surge of public opinion has led to widespread condemnation and skepticism towards you, which has significantly shortened the time required for privatization.

Our staff just gave me feedback not long ago that if things continue like this, we will be able to completely privatize both companies in three months at most, or even less.

Before that, you'd better refrain from making any excessive moves with these two companies, such as injecting capital or releasing positive news, so as not to erode public confidence in your leadership of MGM!

John's words were all for Lin Haoran's sake.

If handled properly, Lin Haoran's privatization of the two MGM companies can not only speed up the process but also significantly reduce costs.

After all, because trading in the US stock market is too free, consortia often need to pay a premium of more than 20% during the acquisition process to successfully privatize a company. Many consortia can only pay a premium of 40% or even 50% or more!

This is the price of a public offer; you have to offer a price that most shareholders can't refuse in order to get them to willingly hand over their shares.

Those shareholders also know that if you don't offer a high enough premium, they can simply continue to hold their shares, waiting for you to raise the price again, or simply waiting for other buyers to appear.

But Lin Haoran's situation is completely different now.

The barrage of information warfare landed on him, shattering the confidence of those shareholders.

They no longer expect higher premiums, nor do they wait for other buyers; they just want to get rid of this hot potato as soon as possible and pocket the cash.

Panic is the best bargaining chip, and those who create panic are helping them drive down prices.

It's fair to say that those Hollywood squid conglomerates really did try to steal a chicken but ended up losing their rice instead!

Lin Haoran quickly calculated in his mind.

If the company were to privatize through the normal route, it would need to pay a premium of at least 20% to 50% for the outstanding shares of MGM Grand and MGM Studios.

Based on the current total market capitalization of the two companies, this premium is at least over two hundred million US dollars, and it is not impossible that it could even be four or five hundred million US dollars.

But now, due to the panic caused by the propaganda war, he is likely to acquire these shares at a price close to the market price, or even at a discount.

The cost savings from this round trip could amount to hundreds of millions of dollars.

This money is enough for MGM to launch ten to fifteen medium-sized film projects in the next two to three years, or to establish a complete distribution network worldwide, or to renovate and upgrade the MGM Grand Hotel to a whole new level.

Meanwhile, the group of people who launched the propaganda war inadvertently saved him this huge sum of money.

If they knew the truth, I wonder what their expressions would be. They would probably be the frustration of trying to steal a chicken but losing the bait, or the anger of shooting themselves in the foot.

“Okay, thank you for your help, John. Let me know if there’s any updates. I’ll probably be in Las Vegas for the next few days and won’t be going to Los Angeles for now,” Lin Haoran said.

"Okay, I'll hang up now!"

Lin Haoran put down the phone, a slight smile still lingering on his lips.

The news this morning was indeed completely unexpected for him.

He was caught off guard when Hollywood giants ganged up on him.

Unexpectedly, this move by the squid conglomerate actually helped him a lot.

Although he will have to confront these Hollywood giants directly in the future, and they may use other methods to cause him trouble, he has at least gained the upper hand in the battle of privatization.

As for what will happen next, he will take it one step at a time and is not in a hurry.

As someone who traveled from the 2020s, Lin Haoran naturally knew that the Squid Consortium was not easy to deal with.

In later generations, the United States was infiltrated and controlled by these squid conglomerates in almost every aspect.

Finance, media, technology, healthcare, energy...

Behind every industry that is vital to the national economy and people's livelihood, there is their presence.

Over several generations, they have woven an impenetrable network of power, firmly grasping the political, economic, and cultural spheres of the United States.

Anyone who tries to challenge this network will be swallowed up without even realizing it.

But Lin Haoran knew that this network was not foolproof.

Its greatest weakness lies precisely in its arrogance.

Decades of monopoly have given them the illusion that Hollywood is their backyard and that no one can shake their position.

They didn't think a Chinese businessman from Hong Kong could cause any trouble, so their first reaction wasn't to cooperate, but to suppress, smear, and exclude him.

This arrogance is Lin Haoran's opportunity.

If they are rational, calm, and willing to sit down and negotiate, then Lin Haoran will be in a much more difficult position.

After all, even a powerful dragon can't suppress a local snake. When doing business on someone else's turf, the best strategy is to make money peacefully.

But they chose the most emotional response: rejection, attack, and isolation.

This reaction precisely reveals their insecurity.

They are afraid of change, afraid of challenges, afraid of a player who is not under their control entering the game.

A person who acts out of fear will always make mistakes.

They were already making a mistake by launching a propaganda war, which in turn helped him reduce the cost of privatization.

This mistake is worth at least hundreds of millions of dollars.

If they continue to "help" in this way, Lin Haoran wouldn't mind accepting even more. (End of Chapter)