Chapter 795

Simon was talking to Bryce Levison in a low voice when a slightly hoarse old greeting came to his ear: "Hey, Simon."

Looking around, it turned out to be Warren Buffett.

At the top of the social pyramid, Simon is not the first time to contact with Buffett. He has met with him in some social occasions before, but he is not familiar with him.

Tonight's meeting was not planned.

Simon knows that Buffett will attend and plans to have a chance meeting. In fact, both sides know each other's purpose very well. Otherwise, a 65 year old man would not ask for an invitation to attend such a fashionable party.

In history, the reason why Warren Buffett agreed to sell metropolitan ABC Group to Disney in 1995 was that the impact of cable TV and Internet on traditional public TV network was more and more obvious, so he chose high-level cash out. Facts have basically proved the correctness of Buffett's decision.

After the new century, counting fox, the four major public television networks in the United States are basically declining all the way. In the early years of television networks, TV programs with a total audience of 20 million to 30 million have become more and more rare after the millennium. Although they have been making money, they are not as good as the increasingly prosperous cable TV and the Internet as a whole, and they can only become the appendages of major media groups.

It seems that Buffett's cash out time is a little early, but it is in line with the old investor's investment principle of not seeking to earn the last dollar. It is this kind of steady investment strategy that makes the original time and space of Warren Buffett clear Fannie and Freddie's shares early before the subprime mortgage crisis, avoiding the impact of Berkshire Hathaway.

Smiling, he got up and shook hands with Warren Buffett, then casually introduced Bryce beside him. After greeting, Simon whispered in the woman's ear. When Bryce reluctantly turned away, he sat down with Warren Buffett.

Buffett watched Bryce walk away like a mermaid, joking with Simon: "I envy you young people."

Simon also said with a smile, "Warren, you are not old at all."

In fact, Buffett is in a state of "one house with two wives.".

The investment tycoon separated from his wife in the 1970s, but they never divorced. Over the years, they have been in and out of public as husband and wife. At the same time, Buffett has been living with another partner, which is a couple.

It's said that the relationship between the three is very good. Now, Buffett sends holiday cards to his friends and relatives, even with the signature of the three. Over the years, many media have made fun of Warren Buffett for having two wives.

In fact, Warren Buffett's two wives in one house are not worth mentioning in the rich circle.

When a person can get in touch with the top view of the pyramid, he must find that many things are far beyond the most daring fantasy.

In addition to being stingy in spending money, Buffett is no different from the ordinary super rich in other aspects, one of which is to attend all kinds of top social gatherings.

Of course, except for charity parties that need to donate money.

After another polite compliment to the party, the topic of Buffett turned to igritte. He kept on asking Simon about the company's problems. Although the billionaire is 65 years old, his memory and thinking are still sharp and agile. A lot of information and data related to igritte seem to be printed in his mind.

What's more, it's clear that Mr. Buffett is confused and questioning the financial data of Mr. igritte's rapid rise.

In the past, no matter how surging the Internet wave was, Warren Buffett was determined not to involve in the new technology industry he was not familiar with. This even led to a Berkshire Hathaway annual meeting in which Warren Buffett was thrown eggs by shareholders on the spot, accusing him of missing the best investment opportunity.

Now, the conservative old-fashioned Warren Buffett obviously still can't understand the Internet: "so, Amazon online mall is indeed the business with the most serious losses. Simon, have you ever thought of stripping this part of the business, or cutting down the investment in this area, so that it can develop more steadily, so that the stock price growth potential of igritte after listing will definitely be improved It's bigger. "

Simon realized that Buffett was interested in igritte's IPO.

This is not surprising at all.

What Mr. Buffett likes most is an enterprise that has a "moat". Now, igritte, whether it's advertising or software business, can be described as a "deep moat". No other company in the same industry can compete.

However, for this investor who attaches great importance to profit margin, the defect of igritte is also obvious. The most important point is that the investment is too radical, resulting in huge unnecessary losses in his opinion. If we cut or get rid of these burdens, igritte will immediately become the most ideal investment target of Warren Buffett, with high growth rate, high profit margin, and enterprise moat that is difficult for peer enterprises to cross.

Simon, of course, will not do so to cater to the investment will of Warren Buffett. He shook his head and said: "Warren, e-commerce is an indispensable part of igritte's business system. This business seems to be losing money, but it can greatly increase the types of services in the Internet industry, and then improve users' adhesion to the Internet. In a word, this is a market Cultivation. This is true of all the businesses that igrit is doing now. As long as the public is aware that there are enough services on the Internet, they will gradually consume directly or indirectly in this field. "Buffy nodded and shook his head, and said: "but Simon, there is no lack of capital to develop any business in the Internet field. I think igrit can be more focused. You know, if an enterprise pays too much attention to diversification, the result will not be very good."

Simon said: "of course, I understand that igritte is already working on the relevant layout, and I will streamline the company at the right opportunity, but not now."

Simon said the right opportunity, after the collapse of the Internet bubble.

's early development of new science and technology can not stop the normal economic laws of the capital society. Sooner or later, the bubble burst will come.

At that time, not only will the business be streamlined, Simon will also streamline igritte's rapidly bloated huge staff team. In recent years, in pursuit of rapid expansion, the ireit interior has accumulated various problems. Simon will make snap efforts to solve the problem of the nirvana after the Internet bubble burst.

Obviously, it's impossible for Buffett to understand Simon's mind. He thought that this was the pretext of young people. He only shook his head slightly and changed the topic and said, "Simon, I find you are planning to buy ABC, right?"

Simon has revealed many flaws in this matter.

Like ESPN shares from the Hurst family.

For example, last year's big IPO Financing.

In the past few years, Simon specially handed over several popular TV programs, such as friends and the story of the emergency room, to two other TV networks. Simon's arrangement is similar to Hollywood's foreign cooperation projects, with parasitic penetration. However, in Buffett's view, this obviously has the purpose of deliberately restraining the development of ABC in order to lower the offer when launching the acquisition, which is actually another part of the fact.

In this case, Simon did not make a detour at all and nodded: "yes, after the lifting of the ban on media integration, further integration in this field to adapt to global competition is an inevitable trend. Metro ABC is my top priority. Of course, it's not the only choice. Warren, we can talk about the offer now if you like

Berkshire Hathaway holds 25% of the shares of Metro ABC Group. In fact, Buffett has more say in this company than Chairman and CEO Tom Murphy. As long as he agrees, things can be basically settled.

Instead of responding immediately, he complained, "Simon, Denise's share price is too high."

Simon just smiles and shrugs.

In my mind, I remember Disney's acquisition plan for metropolitan ABC, which was a mixed transaction of half equity and half cash. It's obvious that this time, Warren Buffett is also thinking the same way. However, the share price of danielis entertainment is very high now. This investment tycoon does not want to get a full cash acquisition, and is worried that after the stock exchange or partial stock exchange, metropolitan ABC will suffer losses.

Because he has been paying close attention, Simon knows that the current market value of Metro ABC Group is about US $16 billion. As the westero system has driven the recovery of the whole North American stock market ahead of time, the current market value of Metro ABC is definitely beyond the original time line. Taking into account the company's debt of about US $3 billion, the overall US $19 billion has just begun to be acquired In the original time and space, the total transaction amount of Disney's acquisition of metropolitan ABC is equivalent.

This time, daenerys wants to buy the company, with assets and liabilities, the total amount of the transaction must be more than $20 billion.

Simon doesn't feel any loss or pressure for this, because the market value of Denise is actually higher, which has exceeded $130 billion. According to the financial report of Denise entertainment in the first quarter of fiscal year 1995 released in February, the P / E ratio has reached more than 120 times that Warren Buffett absolutely can't accept.

By comparison, Metro ABC's P / E ratio is only 37 times.

Seeing Simon smiling and not answering, bafett frowned slightly and asked, "Simon, do you think there's still room for Denise's share price to rise?"

Simon shook his head. "Warren, who can say that. However, I have enough confidence in Denise. Many people say that the growth of this company has reached the ceiling. However, as long as they pay a little attention to the financial report, it is not difficult to find that Denise's quarterly financial report released in February still has a year-on-year growth rate of 39%. I believe this growth can last for a long time. "

Buffett frowned and thought for a moment, as if determined, and said: "Simon, I can sell metropolitan ABC to you, but I think my shareholders also need to get enough interest protection, so I hope to get a cash plus convertible bond payment method, half cash, half convertible bond based on the current stock price, 10-year term, annual interest 8%。”

Every investor has his own specific investment style.

The transaction of cash plus stocks or bonds is a common method used by Buffett in the acquisition transaction. Cash can ensure safety. Stocks or bonds can not only save a capital gains tax in the short term, but also maximize the benefits in the future. Moreover, what Buffett often asks for is the maximization of the benefits without risk.Simon refused without hesitation: "Warren, if you insist, we don't have to talk about it."

Danielis Entertainment's IPO last year is to prepare for this acquisition of public television network. Considering the financing during the IPO and danielis's subsequent profits, the whole danielis Entertainment Group's current cash reserves exceed $7 billion. As long as the cash is not spent, it must bear the loss of inflation. The more huge the cash, the more so.

Therefore, for Denise entertainment, even if its share price is very high, all cash acquisition is also the top priority.

Now, Warren Buffett wants both cash and a stable high interest bond. He also requires that this part of the bond can be converted into future shares of Denise entertainment at any time according to the agreed stock price in the future. This investor has enjoyed this good thing many times, but it is only when some enterprises are in trouble that they have to agree .

Danielis entertainment is in a good situation. If Simon agrees to this obviously unequal transaction terms, he will not be scolded by other shareholders.

Even so, Simon didn't want the deal to go yellow. He said gently: "Warren, I'm sure I won't accept this kind of transaction mode with unequal additional terms. You have to be responsible to your shareholders, and so do I. So, either all cash or all stock, or cash plus stock, without any extra terms, otherwise, I can only try to cooperate with the other two TV networks. And, frankly speaking, now in Hollywood, only Denise entertainment has enough strength to acquire the three major TV networks. With the development of cable TV and Internet, the decline trend of public TV network is very obvious. The later you choose to sell it, or sell it to other enterprises in the future, it is impossible to get too high price. If you hold it all the time, it's a pity The value of video network will shrink faster, just like the paper media industry now. "

When Warren Buffett heard Simon's words, he looked the same and said, "Simon, if you think so, why buy a TV network?"

Simon said: "it's hard for a single TV network to develop. However, it's an essential part of a large media group. It can provide marketing and sales channels for Denise's other businesses. I don't think you don't understand that. "

Buffett gently shook his head again, did not refute Simon's argument, but once again read fragmentary: "Denise's share price is too high."

The old man still wants stocks, but obviously can't accept Denise's super-high P / E ratio of 120 times.

Simon said with a smile: "then choose all cash, Warren. You should have heard the news. The capital gains tax will be adjusted soon. At that time, the 15% capital gains tax rate will be nothing to your income from investing in Metro ABC these years."

Even if the deal is now negotiated, involving a huge merger and acquisition of US $20 billion, it will take at least three to five months to really wait until the deal is completed.

According to Simon's information, not surprisingly, the capital gains tax reform bill will be passed in May. By that time, Berkshire Hathaway, which has held shares in Metro ABC Group for many years, will be able to enjoy the most favorable capital gains tax rate.