Fang Yang had lunch with Ouyang Ming and several other leaders. In the afternoon, he returned to the company to prepare for the bidding and defense of Dadi Cinema the next day. Fang Yang had the intention to acquire Dadi Cinema, but it was not the only option. If the other party asked for too high a price, Fang Yang would decisively turn around and take the opportunity to transfer the project to another party. Smaller cinemas were also acceptable; it would just take more time and effort.
The following day, Fang Yang, Yang Huajin, Liu Fang, lawyer Su Lin and others visited the headquarters of Dadi Real Estate Company. The 38-story Dadi Real Estate Company may not be very eye-catching, but the fact that it owns an office building with independent property rights in the heart of Shanghai, where land is extremely valuable, speaks volumes about Dadi Real Estate's strength.
The bidding room was set up in a small conference room on the 33rd floor. Fang Yang and his group arrived at 9:20, ten minutes earlier than the scheduled time of 9:30. When they arrived at the reception room, representatives from four parties were already waiting. Fang Yang and his group were the last to arrive, but Yuewen Entertainment Media was the third to arrive, so they were not considered to be very late.
After the receptionist led Fang Yang and his group to a sofa and made them coffee, he said to Fang Yang, "Mr. Fang, please wait here patiently. I will come and let you know when it's almost your turn."
Fang Yang nodded. "Thank you. You can go ahead and do your thing. We'll wait here."
After the receptionist left, within two minutes, the group was led into the conference room. There were four other groups, including Fang Yang, who were kept seven or eight meters apart and did not talk to each other.
The reception room was a bit stuffy. Everyone was preoccupied and wary of one another, afraid that their plans might be overheard and cause trouble.
Fang Yang wasn't used to this atmosphere, so he simply closed his eyes to rest. Anyway, things will work themselves out, and what's meant to happen will happen. What's there to worry about?
The first group to go in came out after half an hour. Judging from their somewhat unpleasant expressions, the talks hadn't gone very well. Yang Huajin whispered to Fang Yang, "These people are from that small film company. I guess they couldn't reach an agreement."
Fang Yang watched as the second group got up and went inside. "Where are these people?"
"We're also a small company. Does Dadi Cinema rank itself based on the size of its capital? If so, then our advantage is greatly diminished."
Fang Yang thought for a moment and couldn't help but laugh: "No matter what the other party thinks, our conditions are what they are. If we can't succeed, we can just acquire a small cinema. It will only take a little more time."
Yang Huajin nodded silently, glanced around, and said nothing more. He didn't know anything right now, so there was no point in saying anything more.
About forty minutes later, the second group of people came out. The receptionist who had come first invited Fang Yang and his group inside, where they were waiting.
Fang Yang stood up, straightened his clothes, and followed the receptionist into the conference room.
Upon entering the conference room, Fang Yang saw a row of tables opposite him, with seven or eight people sitting behind them. He had little contact with these people outside and only recognized one of the municipal government leaders, who was sitting in the middle, currently drinking a cup of tea.
Fang Yang and his group were seated on a row of low benches directly opposite them. The benches were rather low, making them look like they were being judged, which put them at a disadvantage from the start.
Fang Yang was a little displeased, but he didn't show it. He sat down as instructed and waited for the questioning from the other side.
A man in his fifties who looked like a cadre spoke first, "You are Yuewen Entertainment Media, right? You've only been established for six months, and your offer is 1.8 billion, right?"
Fang Yang nodded, "That's right, we've only been established for six months, so our offer is correct."
"Then I'd like to ask, is your 1.8 billion yuan from your own funds, or do you need to raise funds?"
"It's our own money, and we can withdraw it from our accounts at any time."
"Then may I ask, Dadi Cinemas is worth over 20 billion, and you offered 1.8 billion? What is the basis for that offer? Isn't this price unreasonable?"
Fang Yang chuckled, “First of all, I want to insist that the 20 billion yuan of Dadi Cinemas is the initial investment, not the market value. Dadi Cinemas has no fixed assets, so there is no such thing as asset appreciation. On the contrary, the assets have been depreciating over time, which is a consensus in the industry.”
"Who says we don't have fixed assets? Aren't the more than two thousand screens across the country assets?"
Fang Yang shook his head. "Dadi Cinema has two thousand screens, but one-third of them are small screens. According to the current development trend of cinemas, these small screens need to be phased out. In other words, one-third of the assets are worthless!"
Before the other party could refute, Fang Yang continued, "The remaining two-thirds of the large screen also faces the risk of needing to be replaced, because screens have a lifespan. Moreover, the cinema also needs to be renovated. An old cinema can't attract audiences to watch movies! I believe you all understand these things. In fact, the 1.8 billion yuan we proposed has exceeded the actual value of the Dadi Cinema and is an overestimation!"
The older cadre opposite him was a little angry. "Young comrade, how can you calculate things like that? We also had experts evaluate Dadi Cinemas, and they are now worth at least 4.5 billion yuan. Even without the fixed assets you mentioned, the screens are still usable, which are valuable assets. Moreover, the decorations aren't as bad as you say; they have corresponding value even after depreciation. Besides, Dadi Cinemas has been established in more than 2,000 cities across the country, which is also a brand value. This aspect is incalculable!"
Fang Yang argued, "Brand value is built on the fact that Dadi Cinema has its own resource pool, but unfortunately, Dadi Cinema has zero resources in this area, so there is no so-called brand value."
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