Chapter 431: Stalemate
[Chapter 431: Stalemate]
Rainy days always had a way of stirring the deepest laziness within people. Eric had planned to take a day off for himself, but just after nine in the morning, the phone rang urgently.
The helicopter landed on the rooftop helipad at Firefly's headquarters. As Eric stepped off the helicopter, Allen rushed over, holding an umbrella. The two of them jogged toward the elevator, and Allen said, "At nine o'clock, Summer Redstone held a press conference at the Sunset Tower Hotel, announcing that Viacom would participate in the bidding for Disney. Almost simultaneously, Michael Eisner also released a statement indicating that Disney preferred to collaborate with Viacom over Firefly. After hearing that, Disney's stock price surged by 6% within half an hour of the market opening."
Eric listened quietly to Allen's briefing. The elevator doors opened, and they walked into Firefly's conference room, which was already filled with people. The main executives of Firefly, several heads from Firefly Investment Company, and the head of Morgan Stanley's acquisition team were seated around the oval conference table, chatting in small groups. When Eric entered, the buzzing conversation ceased, and everyone stood up, directing their attention toward him.
"Please, everyone, sit down," Eric waved his hand and walked a few steps to his seat. Bernie Sanders, the head of the Morgan Stanley team, skillfully handed him a document: "Eric, take a look at this information first, and we'll talk shortly."
Eric nodded and opened the blue folder, which bore the title "Number One White Knight."
Having completed the filming of Twister and returning to Los Angeles, Eric had prepared extensively for the potential issues surrounding this acquisition. Therefore, the term "White Knight" did not confuse him.
"White Knight" was a technical term used in corporate takeover strategies. Companies that initiated hostile takeovers were typically referred to as "Black Knights," while other bidders that suddenly appeared during a hostile takeover attempt were called "White Knights." A White Knight usually gained the approval of the target company's shareholders or management.
From Eisner's response following Redstone's announcement, it was clear that Viacom had gained the support of Disney's management -- at least of the faction represented by Michael Eisner. Therefore, Viacom could indeed be labeled as a White Knight.
Disney's disappointing performance for two consecutive years had given many people the opportunity to consider acquiring the company. Before announcing the acquisition, Firefly had realized that this takeover would not happen without competition, and there would likely be more than one competitor.
As Eric sifted through the materials in his hands, he marveled at the Morgan Stanley team's efficiency. Less than an hour after Redstone issued the acquisition announcement, the Morgan Stanley team had compiled over thirty pages of detailed information.
Viacom's current market value stood at around $20 billion, primarily engaged in television program production, cable networks, and radio broadcasting. The most notable among these was the infamous MTV music television network, which propelled many famous singers, including Madonna, to stardom.
Redstone, who led Viacom, not only controlled the Viacom group but also managed National Amusements, Inc., which owned a large chain of theaters, with a personal net worth of $4 billion.
Redstone had always adhered to the "content is king" philosophy while running Viacom Media Group, and the idea of acquiring a film company had been on his mind for some time.
In the mid-1980s, he had competed with John Kruger of Metropolis Media for the thriving Orion Pictures but ultimately withdrew due to a financial disadvantage. Additionally, Redstone had invested in stocks of several major film companies, including Warner Bros. and Columbia.
This context clarified that Redstone's sudden announcement to acquire Disney was unlikely to be impulsive.
After reviewing the provided information, everyone quickly began discussing relevant strategies. Compared to Viacom's impressive $20 billion market cap, Firefly might seem relatively weak. However, Eric's greatest asset was the $8 billion in cash at his disposal.
When tackling this acquisition case, Bernie Sanders relayed a promise from Morgan Stanley's upper management: Morgan Stanley could provide Firefly with $2 billion in financing if they were willing to accept investment from Wall Street. If Firefly agreed, that financing figure could increase. Overall, Eric could mobilize more than $10 billion in available funds.
But even in a hostile takeover, it was advantageous to spend as little as possible. Otherwise, Eric wouldn't have had to spend such a high price to hire the Morgan Stanley acquisition team; he could have simply offered a price that any Disney shareholder would accept without hesitation.
For Eric, his bottom line for acquiring Disney hovered around $6 billion, leaving the remaining $2 billion to pay off Disney's debts. That way, he could completely gain control of Disney.
"Viacom announced only its intention to acquire today, indicating they're not fully prepared, which is a significant advantage for us. Viacom's cash flow isn't robust; without preparation, they'd need at least three months to finalize financing, and that time is our best opportunity.
Though Redstone is skilled at financing, he's not without weaknesses. I've heard his relationship with his wife is quite rocky, and they could divorce at any moment. If she suddenly files for divorce during the acquisition process, Redstone might lose control of Viacom due to losing half of his assets, which could undermine investor confidence."
"We can't rely on such circumstances. The key is to seize this three-month window, but if Mr. Williams insists on a full acquisition strategy, Disney's shareholders won't mind waiting."
"I think so too. If we only acquire 51% of the shares, we could easily finalize this acquisition with no more than $2.5 billion, and Disney's shareholders would cooperate."
Seeing that the group was shifting back to discussing the alteration of the acquisition strategy, Eric felt a bit helpless and stated, "I apologize, everyone. I'll reiterate: the full acquisition strategy for Disney will not change. I don't want to save $1 billion now only to end up paying a far greater dividend to other shareholders every year."
The others looked at Eric with some curiosity. Although Hollywood's film industry was growing rapidly, none of the major firms had netted more than $1 billion in annual profits at their peak.
By Eric's tone, it seemed he was confident in turning Disney into a colossal entity earning over $2 billion annually.
The entertainment industry's development was quite unpredictable. Just like in the 1940s and 50s, when major movie studios thrived, a Paramount decree plunged Hollywood into a years-long winter. After finally recovering and finding a suitable operating model, they faced the onslaught of the television industry. Shortly thereafter, the introduction of home video players raised concerns about piracy, leading to a lengthy legal battle with Japan's Sony.
Though Hollywood had begun to revive in recent years, no one could predict what challenges lay ahead. If another drastic industry transformation occurred, Hollywood could plunge back into a winter.
Looking at the crowd, Eric could guess what they were thinking. Everyone had their own ingrained way of thinking, especially since those present were elites in various fields who weren't easily swayed by just a few words. Thus, Eric didn't feel the need to elaborate further. He simply stated, with an unquestionable tone, "So, let's focus our discussion around the full acquisition strategy. Let's not bring up the topic of controlling stakes again, alright?"
Though they couldn't comprehend why this young man persisted so adamantly, Bernie Sanders nodded in agreement first, and the people on Firefly's side showed complete support for Eric.
The meeting continued.
...
While they discussed some relevant strategies, the subsequent announcement of Viacom joining the competition led to a stalemate in the Firefly acquisition team's negotiations with Disney, with no progress made over the following month.
As September rolled in, Firefly's two summer films, Toy Story and Terminator 2, both approached nearly $200 million at the box office. Furthermore, both films began to make their way overseas and achieved impressive results.
Though Fox didn't release films during the off-season like the "Big Seven", the fall slate included the third season of Friends, the second season of The X-Files, and the variety show Who Wants to Be a Millionaire, all returning to Fox.
Friends had become Fox's definitive flagship program, consistently drawing over 20 million viewers, while The X-Files and Who Wants to Be a Millionaire, though not as standout, still netted over $150 million in advertising revenue combined, and the profits from selling broadcasting rights to hundreds of small to mid-sized stations across the country would be even higher.
However, following the rollout of several programs in September on Fox, Disney's stock price ironically surged, leaving Eric both amused and helpless.
...
Due to the stalemate between the acquisition team and Disney, Eric had begun to shift most of his focus toward Firefly's film production.
At the filming location of The X-Files in the northern part of Santa Monica, Los Angeles, Eric planned to leave after having lunch with the crew. On that clear September afternoon, Famke Janssen, dressed in a gray suit for shooting, walked alongside him toward the parking lot.
"I overheard you guys talking. Are you really planning to shoot in Canada next season?" she couldn't help but ask as they neared the parking lot.
"They said filming in Canada could reduce costs by over 30%," Eric replied, glancing at Famke Janssen, "If you don't want to do it, I'll veto that proposal and we can stay in Los Angeles instead."
"I'd rather not be that hated; a 30% savings amounts to around $10 million."
Eric stopped walking and wrapped his arm around her: "For you, I wouldn't mind spending an extra $100 million."
Famke Janssen playfully leaned against Eric's body, teasing, "Haven't you said that to many women before?"
Eric chuckled but didn't respond. Instead, he tightened his grip, and Famke Janssen quickly surrendered, "No, this is a costume, and it'll crease. I have to tidy it up later."
But Eric didn't let go. He leaned in close to Famke Janssen and whispered, "Come over to my place tonight. I just checked with the director, and you have tomorrow off."
Famke Janssen softly consented, and only then did Eric let her go. They walked side by side to the parking lot, where Eric slid into his car, waved goodbye, and instructed the driver to start.
...
After driving for over an hour, they finally arrived at the filming location for Dumb and Dumber, located near Culver City.
Before Dumb and Dumber, TG production company had also made a movie called Thelma & Louise, causing this film's schedule to lag behind Nicole's film, Sarah & Shannon (The Heat), which had already completed shooting in August and entered post-production.
For the New Year release, apart from the Halloween release of the final installment of A Nightmare on Elm Street, Firefly's main features were Dumb and Dumber and Sarah & Shannon. In addition to these two films, Eric was also somewhat involved with Home Alone 3, which was given to Fox, and Dances with Wolves, which had been procured the previous year from Orion.
Fox planned to launch Home Alone 3 for the New Year season, while Dances with Wolves would screen according to a format suitable for awards season. Eric didn't place much weight on the box office potential of this four-hour art film; instead, he hoped it could overshadow Disney's Beauty and the Beast in the Academy Awards nominations.
Yet, there seemed to be other issues at hand. In the actual timeline, The Silence of the Lambs had been released that year, while now it was essentially swapped with Dances with Wolves.
As Eric leaned back in his chair, pondering these matters, he spotted Drew bounding over, tapping on his car window and opening the door. "Eric, what brings you here?"
"I happened to have some time today and wanted to check in," Eric smiled at Drew.
Perhaps due to the atmosphere on set, she looked fresh and neat, sporting a pink baseball cap, a white T-shirt, and jeans, with small sneakers on her feet.
Drew pulled Eric out of the car and said, "They've been filming a scene multiple times; maybe you could help us out."
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