Water and Fire~Chapter 144.1: The Shining Man

 

Chapter 144.1: The Shining Man

Chu Qianmiao recalled the time many years ago when he was working on Hanhai Home Textiles' IPO. Before the restructuring, Zhou Hanhai wanted to sell some of his shares, dividing them into three parts: one to a friend, one for equity incentives, and one for equity financing to a private equity fund. He asked Ren Yan to design a shareholding structure for him.

She remembered that Ren Yan had warned Zhou Hanhai at the time, telling him that this might lead to a somewhat dispersed shareholding in the company. (chapter 05)

Zhou Hanhai said it was okay, he would still be the controlling shareholder.

But that was back then.

After the stock lock-up period expired, the private equity firm withdrew. After Hanhai Home Textiles' private placement and acquisition of Zhaohuan Education, Zhou Hanhai's stake had been diluted to 22%. Zhao Zhenghuan and several other Zhenghuan Education shareholders held a combined 15% stake in Hanhai Home Textiles after the acquisition, and Hanhai Home Textiles' management team held a combined 3%. Out of concern for the company's operational stability, the former Zhaohuan Education shareholders, represented by Zhou Hanhai and Zhao Zhenghuan, and the Hanhai Home Textiles management team signed a concerted action agreement. The three parties collectively hold 40% of the company's shares, effectively controlling more than 30% of the voting rights of the listed company's shares and becoming the actual controllers of Hanhai Home Textiles. They also pledged to act in unison during the company's shareholders' meeting and board of directors' decisions.

Chu Qianmiao now sees Hanhai Home Textiles as a company with dispersed equity, a small majority shareholder, a moderate valuation, significant future appreciation potential, and strong cash flow after the acquisition. This makes it a perfect candidate for a secondary market takeover.

However, he didn't expect the initial takeover bid to occur so quickly, and the bidder to be Henong Shares.

Chu Qianmiao, holding her phone, asked Ren Yan, "What do you think Henong Shares is planning?" After a pause, she shifted the question to a more precise and thorough question: "What is Tan Shen planning?"

Eagle Capital is now the majority shareholder of Henong Shares, and many of Henong's decisions are made by Eagle Capital. Tan Shen, as the Vice President of Eagle Capital, clearly had a hand in today's outcome.

Ren Yan said, "There are generally two purposes for raising a stake: one is investment, which is often short-term, with holders selling out after the stock price rises; the other is acquisition, where the target company typically covets the assets of a listed company, hoping to become a major shareholder or controlling shareholder through the acquisition." After a pause, he said, "Which scenario do you think Henong's acquisition of Hanhai is more likely to represent?"

Chu Qianmiao, of course, thought it was "the second scenario."

Henong Shares wanted to control Hanhai Home Textiles.

But her mind raced as to why Henong wanted to do this.

A successful acquisition of a listed company means the acquirer acquires the assets of the target company. This allows the acquirer to profit from the appreciation of the target company's assets and to carry out industrial integration of the target company's assets and its own assets.

So, yes, the reason is quite obvious. Currently, the top three educational institutions in the sector are Henong Co., Ltd., which has already acquired Xingfei Education and Yisi Education, and Hanhai Home Textiles, which has acquired Zhaohuan Education. If Henong Co., Ltd. can control Hanhai Home Textiles, then Henong will essentially control the top three in the education market. In this case, it's not an exaggeration to say that Henong controls the entire education market.

And since Henong is backed by Yingji Capital, it's essentially Yingji Capital's ambition to control the entire education market.

Chu Qianmiao almost felt a sense of admiration for Tan Shen. Beyond the personal vengeance and his desire to impress Ren Yan, his move was truly far-sighted and wise.

She secretly thought that if he were willing to let go of his paranoia and resentment, and not make dealing with Ren Yan his greatest life goal, and live his life well, he would have become a very outstanding young talent.

Chu Qianmiao sighed inwardly, then turned back to her thoughts. She said to Ren Yan, "But isn't this a bit crazy? Henong Shares has already spent a considerable amount of money acquiring Xingfei Education and Yisi Education. Now they want to acquire Hanhai shares in the secondary market. This will require another large amount of capital. Can Henong raise that much?"

Ren Yan replied, "It's certainly not easy, but Yingji Capital specializes in dealing with money. They have extensive financial resources and can raise funds for Henong through highly leveraged financing."

Chu Qianmiao said, "But the risk is too great. If the stock market fluctuates or other circumstances arise, Yingji Capital will likely be hit hard by the highly leveraged debt. So, are they really willing to take that risk?"

Ren Yan paused, then said, "You've been in the capital market for many years. Don't you see through the essence of human nature: the pursuit of profit? When people see profit, they often turn a blind eye to the risks."

Chu Qianmiao thought, "Yes." Perhaps Tan Shen had grasped the mentality of the head of Eagle Capital, and thus was able to encourage him to launch this high-profile takeover bid.

Chu Qianmiao held her phone, pondered, and asked, "What do you think we should do now?"

Ren Yan said, "Be patient and wait and see."

During this period of waiting, Henong Shares acted swiftly. With the steady flow of financial support from Eagle Capital, Henong quickly increased its stake in Hanhai to 10% in the secondary market, launching its second takeover bid.

At this point, everyone on Hanhai's side remained relatively calm, a little more nervous than before, but not yet panicked.

But soon, a piece of news completely shattered everyone's composure. A Henong shareholder had also jumped into the secondary market, acquiring 5% of Hanhai Home Textiles shares, and Henong Shares had become a joint action.

The situation suddenly became tense and the standoff erupted. With just one more takeover bid, Henong's shareholding would be nearly as high as that of Zhou Hanhai, the largest shareholder.

This takeover bid unfolded swiftly and violently, forcing the standoff to a climax. Major financial websites began to follow the incident and report on it. Chu Qianmiao learned from Ren Yan that Hanhai Home Textiles was receiving numerous calls from reporters daily, all hoping that Zhou Hanhai or another representative representing the company would be available for an interview regarding the recent wave of takeover bids.

But Ren Yan urged Zhou Hanhai to remain silent and not say anything. Only by remaining silent could the takeover bidders gain access to no information.

However, spokespersons from Henong and Yingji Capital did agree to be interviewed.

Chu Qianmiao scrolled through the news feed, noticing that every financial channel was flooded with reports of reporters interviewing a vice president named Tan from Yingji Capital, Henong's major shareholder.

According to Vice President Tan, the recent wave of takeover bids from Henong's shareholders in Hanhai Home Textiles was profound and significant, and that the future consolidation of the education industry would be foreshadowed by this event. Vice President Tan also stated that, given this, Eagle Capital attached great importance to this acquisition and would spare no effort to help Henong Shares complete the integration and unification of its education division.

Chu Qianmiao's heartbeat grew heavier as she read the news. The tension grew more and more oppressive with each beat.

It seemed that Tan Shen wouldn't stop, and Henong Shares would continue to acquire Hanhai Home Textiles shares in the secondary market.

She imagined that the atmosphere at Hanhai Home Textiles must be very tense at this moment. Zhou Hanhai, Zhao Zhenghuan, and the other directors, supervisors, and executives must be starting to panic.

Just after arriving at the company that morning, Chu Qianmiao was reviewing the project materials for another project when Hou Lin knocked on the door.

Hou Lin informed her, "Boss, Mr. Zhou's secretary at Hanhai Home Textiles just called me. She said Hanhai will be holding an internal meeting this afternoon to discuss countermeasures regarding the recent Henong takeover of Hanhai. Mr. Zhou and Mr. Ren both wanted to invite you to the meeting. Oh, Mr. Zhou's secretary also said they're currently tied up in some matters and couldn't call you in person."

Chu Qianmiao and Hou Lin arrived at the meeting promptly that afternoon.

Upon arriving at Hanhai Home Textiles, Chu Qianmiao learned what had been so fraught with difficulties for Ren Yan and Zhou Hanhai that they hadn't had time to call her in person. Henong, which now holds 15% of Hanhai Home Textiles' shares, has requested an extraordinary general meeting of shareholders. They have put forward several proposals, one of which is particularly aggressive: the removal of the current directors and the holding of new elections, at which time Henong will also nominate new directors.

Chu Qianmiao was speechless and amused by this ridiculous request. "This is the same tactic used in the Xuebaowan dispute."

Hanhai's board secretary, Yu Yue, was on edge. "But regardless, Henong does have the right to propose an extraordinary general meeting and review the proposal."

Zhou Hanhai's brows furrowed as he asked Ren Yan, "Mr. Ren, what should we do now? Should we apply for a trading halt?"

Ren Yan shook his head. "It's not the right time yet."

Yu Yue, somewhat impatiently, asked, "Then when will the time be?"

Chu Qianmiao spoke up for Ren Yan, answering Yu Yue and everyone in the meeting room. Her voice held authority, each word ringing with conviction. "When we can agree on an effective countermeasure, we'll suspend trading and implement it to save ourselves. If we can then strike back at the other party, completely neutralizing their attack, that would be even better. But before that, a trading halt isn't a long-term solution, and there must be a legitimate and appropriate reason for it; otherwise, regulators won't approve it. Furthermore, if there aren't effective defensive measures after the suspension, we'll still have to face repeated attacks from the barbaric Henong when trading resumes."

Ren Yan nodded gently and said, "That's right."

Zhao Zhenghuan lacked Zhou Hanhai's cunning. Even when anxious, he didn't show it. In contrast, he was clearly anxious. "Then let's come up with a countermeasure now. If Henong keeps increasing their holdings, I think they'll eventually take Mr. Zhou's place as the largest shareholder."

His words expressed the worries weighing on the minds of all Hanhai management. The atmosphere in the large conference room grew oppressive, filled with everyone's apprehension.

Ren Yan looked at Zhou Hanhai with a firm expression, each word powerful. "Mr. Zhou, please leave the matter of the extraordinary general meeting and the motion to remove the directors to me."

After the meeting, Ren Yan said to Chu Qianmiao, "You just reminded me of something."

Chu Qianmiao asked, "What did I say?"

Ren Yan kept it a secret, "I'll tell you when the time is right, when I'm sure it can be implemented."

Chu Qianmiao stopped asking questions. Sometimes, asking questions before the right time is just unnecessary trouble.

She and Ren Yan changed the heavy topic of work. Ren Yan extended an invitation to her on behalf of her grandmother, "Your reviewer friend asked me to invite you to dinner tonight."

Chu Qianmiao happily accepted.

Ever since becoming a book friend with her grandmother, Chu Qianmiao would visit her every few days to share storytelling and chat with her. Her grandmother's memory was still deteriorating, but the rate of decline had finally slowed.

Chu Qianmiao taught the housekeeper how to buy groceries online. After discovering the magic of online shopping, both Grandma and the nanny were like little children, happily placing orders every day. Piles of vegetables, fish, and meat were delivered to their home, filling Grandma's refrigerator to the brim. Now, even Ren Yan's refrigerator has become a groceries warehouse.

To use up all the food, Grandma enthusiastically invites Chu Qianmiao to dinner every few days.

That night, on a Friday, Chu Qianmiao followed Ren Yan to Grandma's house and unexpectedly discovered Tan Shen there. Grandma had called him back for dinner.

The four of them gathered around the table, and only Grandma seemed genuinely happy. Chu Qianmiao witnessed Tan Shen's ability to coax Grandma. He acted like a spoiled child, played silly, and acted irritated, and Grandma was completely amused.

Chu Qianmiao looked at Ren Yan again. He was as dull as a rock, like someone dug out of ice.

Chu Qianmiao's heart was in a state of tension throughout the meal, fearing that Tan Shen would suddenly explode and start a fight with Ren Yan. Then this home-cooked meal would leave her grandmother feeling nauseous.

Thankfully, Tan Shen didn't make a scene during the meal. But after the meal, as the dishes were cleared away and the tea was served, Tan Shen suddenly looked up at Ren Yan.

He put his arm around her grandmother's shoulders, his tone abruptly aggrieved, and said to her, "Grandma, grandma, my brother is bullying me again! Look, he stole my girlfriend!"

She followed his words angrily, "That won't do."

Chu Qianmiao's heart skipped a beat. She had been enjoying storytelling for a while, but Tan Shen's nonsense couldn't stop her.

She immediately turned to look at Ren Yan, then at Chu Qianmiao. Her cloudy eyes were about to scold her brother, but the sight of Chu Qianmiao made her hesitate and think.

Tan Shen shook her shoulder, urging her, "Grandma, grandma, what are you thinking about? Shouldn't you tell me about my brother?"

Grandma looked at Chu Qianmiao and shook her head, "No." Chu Qianmiao's eyes gave her encouragement and reassurance, reassuring her grandmother about her distorted memories. After saying no, she continued, "I remember now. It wasn't your brother who bullied you, it was you who bullied your brother. It wasn't your brother who stole your girlfriend, it was you who was being mean and intercepted your brother's girlfriend."

Grandma turned to Tan Shen, "Xiao Shen, your brother can't bully you, and you must never lie to your brother again."

Tan Shen was stunned for a moment, but he immediately smiled at his grandmother, a smile that was as bright and carefree as a big boy. "Grandma, whatever you say is right. Grandma, you must be tired. Let Auntie take care of you. Go wash up and get ready for bed."

Tan Shen called the housekeeper and discreetly sent Grandma away.

Only three people were left at the table.

Tan Shen suddenly smiled, his smile warm and gentle. "How are you, Mr. Ren? How are you all at Hanhai Home Textiles?" he asked. "You and them should cherish this time together. Who knows, it might not be long before Hanhai Home Textiles is named Zhou anymore. By the way, when Hanhai Home Textiles changes its name, I'll tell Zhou Hanhai why he was so unlucky to be chosen by Yingji Capital. It's all because of you."

Ren Yan looked at him and said coldly and succinctly, "Whether Hanhai Home Textiles will change its name or not, I'll wait and see."

Tan Shen's expression changed like a Sichuan opera face-changing. Just now, it was full of sunshine, but now it suddenly turned cold and disgusted. "Speaking of which, did I underestimate your despicableness? You actually managed to brainwash grandma into thinking I was bullying you. It's ridiculous."

Ren Yan glanced at him, as usual, ignoring him.

Chu Qianmiao had always been unwilling to bear the stigma she didn't deserve. She told Tan Shen, "Letting Grandma know the truth about everything isn't despicable. Also, telling lies is brainwashing, while telling the truth is explaining the facts. If you're talking about brainwashing, it's you who's been brainwashing Grandma for over a decade or two."

Tan Shen turned to look at Chu Qianmiao, his eyes etched with a smile.

A flash of pain flashed through his chest.

"Chu Qianmiao, I hope you won't interrupt me when I'm talking to Ren Yan. After all, this is our family matter."

Chu Qianmiao choked.

Ren Yan spoke this time, "She'll soon be your sister-in-law. She has every right to butt in on our family affairs."

Chu Qianmiao felt a warm sensation in her heart. Tan Shen's eyes darkened.

He seemed to be losing control of his emotions, accusing Ren Yan, "You stole my father's care, you stole her, and now you've even taken my grandma and grandma's care. Ren Yan, are you done yet? Do you want me to die?"

Chu Qianmiao could hardly bear to hear it anymore. She increasingly felt that Tan Shen was the kind of person who never saw his own mistakes, but always found a way to pin them directly on others.

"Tan Shen, haven't you been the one doing all the things you're accusing me of?" Chu Qianmiao looked at Tan Shen and said, "Tan Shen, do you know what you're like? You're like a fussy, unreasonable child. When you don't get what you want, you throw a tantrum, you get mean, and you blame everything on others. But you're thirty years old now. It's time to grow up."

Tan Shen kicked the table leg violently, "Shut up!" The table was even tilted by his kick. "What do you know? This is all Ren Yan's fault. I'm the victim, Ren Yan. Why didn't you die in the mountains? You didn't die, but you hurt my dad. Because you, he died, and Chu Qianmiao, Who do you think you are? Why do you need to lecture me? You're just a sl*t who's done with me and my brother."

Before he could finish his unbearable words, a full glass of water was splashed in his face.

The three people in the dining room were stunned.

They all looked at their grandmother, who had suddenly reappeared.

She still had the glass of water in her hand, and it trembled violently with her hand.

A thin layer of tears welled in her eyes. She put down the cup and, somewhat bewilderedly, picked up a tissue to wipe the water droplets from Tan Shen's face.

"Xiao Shen, you can't talk to a girl like that. You can't talk to your brother like that. You're brothers. When I'm gone, you two will be the only blood relatives left in this world. You should take care of each other, you can't hurt each other."

Grandma choked up, her whole frail body trembling.

Chu Qianmiao felt deeply distressed that night. It turned out that Grandma hadn't left; she was standing at the door. For the first time, she was lucid enough to witness the two brothers' true interactions. Their interactions overturned her illusion of brotherly love. Chu Qianmiao felt sorry for Grandma, and in that moment, she even prayed, "Let this old woman remain confused, let her believe they were a pair of loving brothers, and don't let this heartbreaking night linger in her mind."