[Chapter 422: Goal: Acquire Universal]
It seemed that the inertia of history hadn't been significantly altered by his transmigration. Panasonic Electronics had still followed its original trajectory to reach this point.
As his company grew stronger, box office revenues soared. Especially with the rise of UPN TV Network, his media empire began to show its formidable potential. The only things missing were overseas distribution channels, a seat at the MPAA table, and of course, a deep content library -- after all, his company's collection of films and series was still pitifully small.
Linton had naturally set his sights on Hollywood's "Big Seven." Acquiring any one of them would instantly transform his media empire into a giant.
Now that Panasonic Electronics was willing to sell Universal, he absolutely couldn't miss this opportunity.
According to public records, Japanese Panasonic Electronics had acquired the Universal Group in 1990 for $6.1 billion, which included the following assets: Universal Pictures (including Universal Music), MCA TV Group, MCA Home Video and Pay TV, Putnam Publishing, Universal Amphitheatre, Universal's vast film and TV archive, Universal Studios theme parks, a 50% stake in USACable, and 40% ownership of Cineplex Odeon cinemas.
But five years had passed, and Hollywood was still Hollywood. Universal remained the same Universal. Panasonic had never truly taken firm control; instead, it had fattened up Universal's management team.
Historically, this acquisition ended up a loss for Panasonic Electronics. But this time, there was Linton -- an exception to the rule.
Universal Music rapidly rose, boosting profits dramatically. Universal Pictures benefited from a close partnership with Linton's film company, ranking amongst Hollywood's top earners.
Though other subsidiaries were poorly managed and underperforming, the overall profit for Universal was still strong. Last year, profits hit an all-time high of $730 million.
However, a closer look revealed that at least $500 million of those profits came from projects with Linton. Apart from Universal Music, most subsidiaries were out of control.
These top executives, unrestrained and unchecked, had become outrageously greedy -- so much so that even Linton was disgusted.
Not long ago, a scandal rocked Universal Pictures. The disaster of Waterworld exposed the depths of corruption and greed within Universal's senior management.
The movie's investment was $175 million, marketing cost $60 million, making total expenses reach $235 million. Yet in North America, it only grossed just over $80 million. With all the rights and royalties factored in, the loss was no less than $170 million.
But was that the real story? In reality, if project management had been sound, total costs wouldn't have exceeded $70 million.
Where did the extra money go? No one knew -- it was the company's loss, but these managers were the ones getting fat off it.
Ironically, the Waterworld fiasco slashed Universal's market value in the eyes of industry insiders, which worked in Linton's favor for this acquisition.
Thinking this through, he immediately gathered Winnie, Goodman, Henry, Robert, and Chris (UPN) for a meeting. Since Skycrest Capital was registered overseas, Richard had to keep his distance publicly and couldn't be openly involved.
At the meeting, he updated everyone on Panasonic's troubles and its intent to sell Universal. He also announced his own intention to acquire the company.
Excitement ran high, and everyone enthusiastically gave their full support.
Linton then made two key decisions. First, Goodman was tasked with hiring a professional acquisition consulting firm to conduct a comprehensive evaluation of Universal Group.
Second, Winnie, Robert, Chris, and Henry were to thoroughly assess their own assets to see how much capital they could assemble.
---
A week later, all the information came back.
On the 16th floor of Linton Tower, in a small conference room, Winnie, Goodman, Henry, Robert, and Chris gathered again.
First came the consulting firm's evaluation report on Universal Group.
The report was lengthy, but in summary: assets were healthy but management was chaotic; profits were worrying. The current valuation was $6.3 billion.
Interestingly, the report concluded with a key note: "With efficient management introduced, Universal Group's future is promising."
Next, they reviewed their available funds.
There were four main pools.
The strongest was Winnie's charity foundation. The total market value of all its stocks was just over $5 billion, though it owed nearly $300 million to banks.
Its largest holdings were Microsoft shares. Winnie had been steadily increasing her Microsoft stake and now owned 3.1% of Microsoft. After the June launch of Windows 95, Microsoft's market value surged past $80 billion, making her Microsoft shares worth over $2.4 billion.
Next was Skycrest Capital's stock holdings: Netscape shares were worth over $1.1 billion, alongside other stocks like Oracle, AMD, Nokia, and Intel -- all in the computer and network communication sectors -- adding up to more than $1.5 billion in value.
Skycrest's other venture investments were still in incubation, not yet public or liquid, so they were not considered for now.
Besides stock, Meluva Publishing and Fire Elf Games could each contribute $50 million in liquid funds without disrupting operations.
The second block was Skycrest Capital itself, holding only two major stock assets: 2.656% of Microsoft (~$2.1 billion) and 8.2% of Cisco.
Since acquiring 7% of Cisco from Sequoia Capital at the end of 1992, Richard had joined Cisco's board. He never interfered in management, focusing only on his interests.
When Chambers became Cisco CEO earlier this year, he led an aggressive acquisition spree, buying three influential companies in eight months.
Each acquisition triggered financing rounds, with Richard being the first to invest cash, growing Skycrest's Cisco stake to 8.2%.
Chambers wasn't just great at strategy and acquisitions, but excelled at absorbing these companies into Cisco's family, launching competitive products.
Cisco had since become the world's largest network equipment manufacturer, dominating its market, with a soaring market cap exceeding $30 billion. Skycrest's 8.2% stake was worth more than $2.46 billion.
Together, these two stock holdings totaled $4.56 billion, although they had nearly $600 million in bank debt.
The third block was the Linton Film Company. Besides maintaining sufficient cash flow, extra funds had been invested in tech stocks with Winnie's help.
They held over $1.3 billion in various stocks, plus $590 million in cash. The company currently had no major projects underway and kept $90 million in reserve to ensure smooth operations.
The fourth was UPN TV Network. With no investments, the company held more than $1.7 billion in cash. Since key growth plans were rolling out, $300 million needed to stay liquid.
In total, Linton could mobilize about $2 billion in cash.
Excluding stocks already mortgaged, collateral-ready stocks could provide $8.5 billion in value.
With a 75% loan-to-value ratio, this could generate over $6.3 billion from banks.
Adding cash and loans, the total capital raised reached $8.3 billion.
It looked like funding to acquire Universal was more than sufficient.
...
"Winnie, Goodman, Henry, get those stock collateral documents ready for loan applications as soon as possible."
"Got it."
"Henry, arrange meetings with the top executives at Wells Fargo and Bank of California."
"Will do."
"Goodman, get in touch with a professional acquisition negotiation firm to support us during talks and assemble a negotiation team immediately."
*****
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