Chapter 912 You are the goose that lays golden eggs
Xiao Shiqiu told me that he had considered it for a long time and held several family meetings to discuss it. He agreed to acquire the Xiao family's original assets, but did not accept just management.
"If I were to acquire the company, I would only need to pay a lump sum, but if I let them continue to hold shares, I'm afraid they will try to bring people into the company and get involved in its operations, causing trouble for me.
So I thought of giving enough money at once to save some trouble.
Although my cousins were very tempted by the price I offered, my uncles were not willing to pay.
After I put myself in their shoes, I understood it all at once.
"I wouldn't want to do that either," I curled my lips, "If we divide the money among the children, they'll all be spent sooner or later. But with you here, the company is like a goose that lays golden eggs, and their children's future lives are guaranteed.
Who would be willing to work hard if they are used to getting ready money? "
Old Master Xiao couldn't resist his nephew's constant nagging and wanted Xiao Shiqiu to agree to the full stock swap deal.
Xiao Shiqiu sighed, "To be honest, I was very reluctant to do a full stock swap. I chose to start my own business because I didn't want to continue to be involved with those two companies.
In my company, my grandfather, my father and my sister all hold shares. They all contributed money at the time, so it is only right to give them shares.
But the people in those two rooms never gave me any help, and there were always a lot of miscellaneous things to do, and I had to clean up their messes all the time.
Although they haven't committed any crimes, they've done a lot of things that violate the rules and regulations. They've almost spoiled the children and nephews of those families!"
Of course, there is another more important reason why they are eager to let Xiao Shiqiu take over. The operation of the Xiao family business has actually been on the decline. First, Xiao Shiqiu's father is old and somewhat unable to cope with the situation. Second, the competition in the traditional industry is also fierce.
The two companies each hold 15% of the shares, and the dividends at the end of the year will be less than 10 million.
Hearing this, I was a little speechless. "Ten million a year, is that too little? There are so many people in the two rooms, ten million wouldn't be enough."
"In the early days, this number was quite impressive, but think about it, they were used to a luxurious life, and a whole family only had 10 million a year, which meant that if several people shared it, each person would not get much. Of course, it was still much better than ordinary people who received a salary.
But my uncles and aunts used to live a life of luxury, but now their dividends have made them live almost as well as many small business owners, which makes them very uncomfortable."
"So they are targeting your STG?" This is a bit shameless. I began to feel indignant for Xiao Shiqiu.
"They want to continue using the Xiao family's money to run STG, but it's obviously not going to work. My great-grandfather and great-grandmother are long gone, and the old man, the eldest uncle, and the third uncle have also separated long ago.
The STG that I founded obviously cannot be considered as a Xiao family business, so even though the other two families covet STG's profitability, they can't say anything.
So we thought of merging with STG so we can continue to reap the benefits of STG."
Xiao Shiqiu's cousins began to go to Grandpa Xiao and act like filial sons and grandchildren. The old man had no younger generations, so he liked these nephews and nieces very much and was gradually moved by their family affection.
As people get older, their hearts tend to soften. Gradually, he also felt that Xiao Shiqiu did not have a brother to help him. Although Xiao Shiru had a good relationship with him, she was a married girl after all, and there was always a layer of distance between her and him as a brother-in-law.
So he began to try to persuade Xiao Shiqiu to consider family ties more, help them, and give them some small favors. It would be enough to give up tens of millions of profits a year.
"After you take over, you can also distribute dividends to them according to their previous shares." I don't know much about business matters, but this is the most obvious question that I can think of. I can't just take charge of the whole thing and then have to pay for it myself.
Xiao Shiqiu smiled helplessly, "Some things are not as simple as you think. If the company wants to revitalize and develop, it has to introduce new businesses. The lowest cost way is to digest them within a group. This is a healthy operation.
If I leave this company completely independent, I will not be able to manage it myself. It is simply not worth my time. If I assign a professional manager, without the resources of STG, it will inevitably continue to decline.
However, after being incorporated into the STG Group, it has become a department, or a component, within the group, allowing it to play a new role. I also have more initiative in personnel appointments and business adjustments."
"That sounds like a good thing. You'll have another company making money for you." I still didn't understand.
"If it was a cash acquisition, then that would be the case. Based on the market price and the estimate at the time, it would have taken six years to recoup the investment, and it would have been pure profit since then.
But a full stock swap is different. If I were to invest solely based on the company's market value, I'd definitely be at a disadvantage. A company on the decline versus one that's maintained rapid growth for several consecutive years, with the same small goal, which one do you think would be more valuable?
When he said that, I understood the problem. "They want to exchange shares for equal value, but you don't want that, right?"
"Yes, of course I don't want to. Let me give you the simplest example. Their original share dividend was about 10 million per year.
If the shares were exchanged at an equivalent value, it would have increased to 22 million that year and exceeded 34 million the following year. To me, it seemed that I had earned more.
But I have to reduce my holdings to a certain extent. From a purely business perspective, I will not acquire such a company and will choose a company with greater potential."
Although I still didn't understand, I would summarize it as, "So your efforts and benefits are not proportional, and you have to spend more time and energy on management. In short, you are at a disadvantage."
"clever!"
Hey~ why didn't you tell me earlier? I was confused and didn't quite understand what you said. If you had just told me directly that I was at a disadvantage, I would have understood.
"What happened next?" I still really wanted to know how he solved it.
"After several negotiations with them, and at my insistence, the accountant calculated a rough conversion ratio."
If based on the original market value, 15% of the original company's shares can be converted into about 1.2% of STG shares, which Xiao Shiqiu would definitely not agree with.
If calculated based on the profitability of the two companies, 15% of the original company's shares would be roughly equivalent to 0.26% of STG's shares. Of course, the people from the two housing agencies would not agree to this.
After several rounds of heated but unfriendly discussions, both sides finally made concessions and the shareholding was converted into 0.8%.
Logically speaking, since the agreement has been signed, there shouldn't be any further trouble.
But many times it is unreasonable.
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