PDLP Chapter 317 The Barbarians at the Gate
Chapter 317 The Barbarians at the Gate
Chapter 317 The Barbarians at the Gate (Part 2)
"That's not how it works. I will keep Bausch & Lomb running," Herzog raised his voice.
Old John had been a little impatient, but after standing up and thinking for a moment, he sat back down.
Larry, however, continued gesturing in the air with his cigar, "Secondly, the Germans have already stated that they want to acquire the company at a premium, but they haven't specified the timing or method. Okay, now I'd like to ask you gentlemen shareholders clearly: if Zeiss acquires the company now, when will your money arrive?"
Herzog hesitated for a moment before saying, "We will follow international practice and exchange Zeiss stock for Bausch & Lomb stock. If minority shareholders insist on cash, we will provide 25% cash, but this will require a three-month transfer and exchange period."
"We don't want Zeiss stock, we want cash!" Herzog's voice once again provoked a loud protest from a minority shareholder.
Herzog explained coldly, "You need to understand that during the trade war between the US and Germany, transferring money was extremely inconvenient—besides, isn't Zeiss stock far more valuable than the dollar?"
Larry smiled and waved his hand, interrupting him.
"That's not how it's calculated. The problem lies in the valuation of the shares. You mentioned $40, but how do you define that $40 value? Especially since it involves two types of stock. Assuming your premise is correct, Zeiss stock is indeed higher than Bausch & Lomb stock, but Zeiss stock isn't publicly traded, so there's no so-called fair market price. How can you demonstrate that your plan is completely fair? Is it buying three Bausch & Lomb shares with one Zeiss share, or ten shares with one Zeiss share? Who decides that?"
"Of course, we have the final say! We can calculate the price difference between the two companies' stocks based on the net assets per share or the dividends paid," Herzog said loudly.
"No, this isn't right again!" Larry thought to himself, "I've thoroughly reviewed all the detailed information about Bausch & Lomb. I already knew that Bausch & Lomb's assets couldn't be shown on the books. I already thought of what you were thinking."
"Due to the different valuation systems of the two countries, Zeiss's stock price includes goodwill, intangible brand value, and its technological barriers in the market, all of which are already reflected in the stock price. However, according to your description, Bausch & Lomb's stock price only includes its previous fixed assets. This comparison is extremely unfair, as it allows you to acquire American company assets at bargain prices. This is a conspiracy; you are using deception to take what belongs to Americans."
Larry's words startled even Dr. Wilhelm, who had been supporting the Germans, causing him to widen his eyes and turn to look at Herzog.
Henry Len immediately stood up. "Mr. Heinrich von Herzog, are you really planning to do this? Good heavens, we know nothing about finance, we had no idea there were so many intricacies in the stock market, we were completely kept in the dark!"
"That's not true!" Herzog protested loudly, his face flushed. "That's just his side of the story; I never said that."
Larry smiled easily. "Yes! You didn't say that—but you definitely intend to. After all, you just said that how you price the stock is up to you—if you think you'll overvalue Bausch & Lomb, then come up with a plan for us. How would you value each share of Bausch & Lomb if not based on net asset value?"
Larry smiled, took out a cigar cutter, cut the cigar tip, put the cigar to his mouth, and gestured for Herzog to proceed.
So you mean to say that what I said is wrong and is only one side of the story? Then let us hear how you price Bausch & Lomb.
Herzog blushed. He was a shareholder of Zeiss and a relative of the German Emperor, but he really knew nothing about stocks.
His initial idea was to price the company based on net asset value. This pricing was straightforward, and it also allowed him to acquire Bausch & Lomb at a much lower price.
Herzog realized that he could no longer explain; the more he explained, the more he would fall into the other party's logical trap. So he immediately raised his head and prepared to switch from defense to offense.
"Please note that I am only outlining my plan at the shareholders' meeting. The specific details will be discussed and finalized with my team before being announced. If my plan is flawed, then what is your plan? You've intruded into the shareholders' meeting and secretly amassed so many shares; are you perhaps also here to acquire Bausch & Lomb?"
While the other party hesitated and considered, Larry had already lit a cigar. He took a deep drag, exhaled the smoke, and smiled, saying, "To show my sincerity, my offer is $42 per share, in cash! I won't use underhanded methods like trading Zeiss stock for other shares, and once the agreement is reached, I will pay a 50% deposit within 72 hours. The remaining balance will be settled within seven days!"
Larry's words caused a stir among the minority shareholders present.
Before Larry revealed this, they thought $40 per share for Bausch & Lomb was already quite a lot. But after hearing Larry's revelation that the Germans were simply using a stock discount, and that this discount scheme was very opaque, and that they had already decided that they couldn't possibly sell their shares for that much.
But now things have taken a dramatic turn; this young man is actually planning to offer $42 per share! A higher premium, and in cash no less!
This offer is too tempting!
"You can't just make things up. Did you bring that cash with you?" Herzog said coldly.
Larry chuckled and pulled an envelope from his coat, which was lying on the seat. He handed it to the lawyer, then, puffing on a cigar, said, "This is proof of a $260 million account from the Morgan syndicate, which serves as my acquisition deposit. In addition, Kodak will provide a $40 procurement contract for the next five years as collateral."
George Eastman, who had been waiting on the sidelines, nodded hurriedly and said loudly, "Yes, I will provide Kodak's procurement contracts for the next five years as collateral."
The two men's coordinated efforts brought smiles to the faces of the minority shareholders. Those who wanted to sell their shares saw the $260 million Morgan syndicate account, while those who wanted to continue holding saw the purchase guarantee from Kodak, Bausch & Lomb's largest customer.
Herzog's face was ashen, but he didn't lose his composure. Instead, he suddenly sneered, "Very well, your plan is very meticulous, and you have plenty of money to resist our takeover. But please remember one crucial premise: once Zeiss cuts off Bausch & Lomb's glass supply, all of Bausch & Lomb's machines will become piles of scrap metal, and Bausch & Lomb will have no reason to exist—"
As he spoke, Herzog turned to stare at Larry, "—If you're willing to pay a high price for Bausch & Lomb's corpse, then please go ahead."
Supply chain! This is the most crucial factor, and Zeiss's biggest trump card. By controlling the glass supply, Zeiss holds the life or death of Bausch & Lomb in its hands.
The minority shareholders panicked again.
The Germans are right, aren't they? What if they don't supply glass? Wouldn't Bausch & Lomb go under anyway?
Larry took a leisurely puff of his cigar. "We're not foolish enough to let someone else hold us back on an upstream material for manufacturing. After we acquire Bausch & Lomb, we will definitely use domestically produced glass."
"Domestic glass? Are you kidding me? If America had such good glass, would it need to import our Schott glass?" Herzog retorted sarcastically.
Larry smiled and turned to Eastman, saying, "George, how are the Corning glass samples? Are they up to standard?"
In reality, Corning had never actually received the glass, but Larry had already revealed his idea to George Eastman, so this was a perfect opportunity for the two to work together.
Eastman stood up and said calmly, "Based on our analysis, Corning's sample imaging, while slightly inferior to Zeiss, is sufficient for photography and basic medical use."
Larry nodded, then turned to Herzog and said, "Enough is enough, right?"
"Fine! If you're willing to give up the high-end market, then go ahead!" Herzog said with a sneer.
Just as the two were arguing fiercely, Dr. Henry suddenly stood up, raised his hands to both sides, and said, "Stop! I understand, you two came prepared, while we were kept in the dark. I didn't expect Bausch & Lomb to have already become your prey. Well, since we've both been acquired, I won't say anything more. I want a real, detailed plan."
Mr. Herzog, you need to tell me if you can truly provide a complete acquisition plan. Mr. Livingston, you can't just talk the talk; you need to tell me whether the Corning glass plant can replace, or at least partially replace, Schott's glass. I need concrete data!
Herzog nodded, then turned to Dr. John and said calmly, "Alright, please give me some time, and I will provide you with a more concrete and worthwhile acquisition plan."
"And you two?" Dr. William turned to look at Larry and Eastman.
"Ten days is the limit! Since we are discussing the future of Bausch & Lomb, I think the future should not be determined by the past, but by the efficiency of capital. Ten days is enough," Larry replied decisively.
At this point, Henry Len raised his hand. "I support this plan, with a ten-day deadline! To be honest, I'm more concerned about the survival of Bausch & Lomb. Of course, I also need a concrete plan from Zeiss; at least we need to know where the money will come from and how the debts will be repaid."
Mr. Lun's statement was met with unanimous agreement from the minority shareholders.
Once the buzzing subsided, Dr. William announced the final decision with a stern face.
"Okay, that's settled then! We'll meet again here at 3 p.m., ten days from now, on May 22nd."
Herzog's face was ashen. He hadn't expected his seemingly foolproof acquisition plan to end like this. He looked at Larry, his eyes narrowing, revealing a hint of resentment and ruthlessness.
After tidying up Kaiser Wilhelm II's letter, Herzog went to the lawyer's office to verify the other party's bank account before slowly walking up to Larry, staring into his eyes and asking, "You're using American tariffs to build a wall, using Wall Street leverage to dig a trench. This isn't business; it's financial predation."
Larry chuckled and shook his head, taking the cigar in his hand. "No! Sir, you're mistaken. This is a victory within the rules. You brought a personal letter from the German Emperor, tinged with arrogance, but I brought a market contract. In our country, the Emperor is sidelined; the contract prevails."
Herzog stared at Larry for a good ten seconds, then tucked the folder under his arm and walked straight out the door.
The servants waiting outside the door quickly draped a trench coat over him and held an umbrella over him.
Herzog looked coldly at his subordinates and said softly in German, "There is a traitor among us. Someone has betrayed me—"
This abrupt remark caused the servants to exchange bewildered glances. But Herzog said nothing more; he snatched the umbrella from a servant, opened it, and walked alone into the rain.
The servants had no choice but to follow.
Inside the room, Dr. John Sr. stood up, leaning on his cane, and walked slowly to Larry. He asked shakily, "Why did you do this, young man? Do you, like that German, also want to take possession of my life's work?"
Larry's face showed sincerity and respect. He stood up respectfully, bowed his head and said to Dr. John Sr., "I do this because I believe that true optics lies not in the laboratory, but in the hands of Rochester technicians. And my job is to ensure that their hands do not tremble because of unemployment."
"So, you really want to keep Bausch & Lomb in the US?"
"Of course, but more than that, I would like to keep Bausch & Lomb in the US. The US needs a great optics company like Bausch & Lomb."
Dr. John stared at Larry for a dozen seconds, then, without comment, picked up his cane and slowly walked towards the door.
As he passed George Eastman, Eastman blushed slightly and said, "Dr., I have prepared a birthday present for you—"
"No! Thank you, I'm too old to accept this—" Old John did not turn around or stop.