Golden Spoon Investment Portfolio - Chapter 248

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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248. They were the ones who first brought up selling their stake.

March 28, 1996.
A taxi pulled to a stop in front of the Peninsula Hotel, which had stood sentinel for years in the heart of Tsim Sha Tsui, Hong Kong’s most vibrant and bustling commercial district, overlooking the beautiful Victoria Harbor.
A middle-aged Caucasian man with a weathered expression stepped out from the back seat.
It was Eric Burnas, who had been recruited from Merrill Lynch to the Eldorado Fund and now operated several shell companies in Hong Kong.
Eric passed through the glass doors held open by a uniformed doorman and entered the hotel, crossing the palatial, lavishly appointed lobby with practiced ease before heading toward a café tucked to one side.

“Welcome, sir.”

A Female Server standing at the entrance greeted him with a smile.

“I should have a reservation under the name David Chen.”
“One moment, please.”

The Female Secretary checked the reservation book and turned back to him.

“Are you Mr. Eric Burnas?”
“I am.”
“Your party arrived earlier and is waiting for you. Please follow me, and I’ll show you to your table.”

Eric followed the attentive Female Secretary into the café.
The café, built along a row of columns that ran the length of one side of the lobby with its soaring three-story ceiling, was nearly full despite the afternoon hour on a weekday.
Soon the Female Secretary stopped before a table where an Asian man sat waiting.
He appeared to be in his late thirties, with a receding hairline and the soft, generous features that come with age and prosperity.

“Mr. Eric Burnas?”

The man at the table rose and asked, and Eric answered immediately.

“Yes, that’s right.”
“Ha ha ha. Delighted to meet you. I’m David Chen, the one who called you.”

Speaking English with Hong Kong’s distinctive accent, the man extended his hand first, and Eric grasped it in a firm handshake.
The business card Eric received bore the title of Manager at Peregrine Securities Hong Kong.
As the two men settled into their chairs, a Female Server placed a menu before them and asked.

“What would you like to order?”

David Chen dabbed his forehead with a handkerchief and spoke warmly.

“The Earl Grey tea here is quite excellent. They use proper tea leaves, and the aroma is absolutely wonderful.”
“Then I’ll have the same.”

David Chen turned to the Female Server waiting beside the table and held up two fingers.

“Afternoon tea set, please. Two cups of Earl Grey black tea.”
“Understood.”

The Female Server bowed lightly and left the table. David Chen smiled with his eyes narrowed, looking at Eric Burnas.

“Thank you so much for coming out on such short notice.”
“Not at all.”
“I heard you used to work at Merrill Lynch?”

Having lived in Hong Kong for over five years, it was information I could easily verify with just a few phone calls, so Eric nodded readily.

“That’s correct. I worked as a Senior Trader at the Merrill Lynch Hong Kong office until the year before last.”
“I hear you were one of the top five traders at the Merrill Lynch Hong Kong office.”
“Thank you for the compliment.”

Though he was smiling, I could feel the sharp gleam in his observant gaze.
It meant he wasn’t as soft as he appeared on the surface.
When Eric deliberately feigned modesty and answered humbly, David Chen burst into hearty laughter.

“Ha ha. I wish I’d known such a talented individual existed—I would have made a recruitment offer to our company long ago.”
“You’re too kind.”

The Female Server approached the table and set down the ordered menu along with the place settings.
True to a five-star hotel, all the gold-plated tableware was from the luxury brand Tiffany & Co., and the silver tea service set likewise displayed an elegant design.
From the three-tiered tray stacked with scones, sandwiches, and cakes wafted a sweet and savory aroma.

“Please enjoy.”

As the Female Secretary left the table, David Chen skillfully lifted the silver teapot, placed the strainer over the teacup, and poured the black tea.

“Since I recommended it, why don’t you give it a try?”

Eric gave a slight nod and lifted the teacup to his lips, taking a sip.
The refreshing taste with its subtle malt and rich fruity notes immediately told me that premium-grade tea was being used.

“How is it?”
“Excellent. It’s every bit as good as a professional tea house.”

Before coming to Hong Kong, Eric had known little beyond coffee when it came to tea, but now he had developed an appreciation for the nuances of black tea.
David Chen retrieved a scone from the three-tiered tray and placed it on the appetizer plate, then posed a question with a smile still playing on his face.

“By the way, the Jupiter Fund you’re currently with—it’s quite an unfamiliar name. Is it a private fund you assembled yourself, Mr. Burnas, or perhaps a subsidiary of another investment company or fund?”
“I’m afraid I can’t disclose that information.”

Eric set down his teacup without any change of expression, his reply cutting and direct.
David Chen, who had been watching him with narrowed eyes, soon smiled and apologized.

“Ha. It seems I’ve been rather curious and probed too deeply for a first meeting. If I’ve made you uncomfortable, I sincerely apologize.”
“Not at all.”

He was laughing, but he was clearly a formidable opponent nonetheless.
One could tell simply from the way he smoothly extricated himself without creating tension in the atmosphere.
Eric kept his guard up internally, leaned back against his chair, and asked calmly.

“I’m curious—what was the purpose of asking me to meet?”

David Chen then set down the knife and fork in his hands, dabbed the corner of his mouth lightly with a napkin, and answered.

“I understand that the Jupiter Fund holds a 5% stake in the Midopa Department Store in Korea. Is that correct?”

Eric nodded at David Chen’s question.

“That’s right.”

David Chen then leaned forward slightly and spoke.

“We would like to purchase that entire stake. Would you be willing to sell?”

Eric, who had anticipated this turn of events, felt a flicker of interest flash across his eyes.
However, he maintained an outward composure and posed the question once more.

“You’re asking us to sell our stake in Midopa Department Store?”
“That’s correct.”
“I’m curious why Peregrine Securities would want to purchase Midopa Department Store shares.”

David Chen shrugged his shoulders and replied as if it were nothing significant.

“One of our major clients is interested in acquiring a stake in a Korean distribution company, so we’re simply acting as an intermediary for the transaction.”

Eric rested one arm on the table while studying him intently.

“In that case, couldn’t you simply purchase the shares on the Korean stock market?”
“We intended to, but it turns out the foreign investment quota for Korean stocks has nearly been exhausted.”

The excuse he offered was so transparently flimsy that it bordered on audacious.

“So that’s why you’re asking us to sell our stake.”
“Precisely.”

The Korean stock market had a ceiling on how much foreign investors could invest per stock, and once that limit was reached, no additional shares could be purchased regardless of available capital.
While the explanation sounded plausible on the surface, Eric tilted his head with a skeptical expression.

“If I’m not mistaken, the foreign investment quota in the Korean stock market is being raised from 15% to 18% in a few days. Couldn’t you simply make your purchases on the market at that time?”

Of course, Eric already knew exactly why the other party wanted to acquire Midopa Department Store shares, but he feigned ignorance.
Chen’s eyes narrowed momentarily as if struck by the point, but he quickly recovered with a forced smile.

“Even with the increased quota, it’s only a 3% expansion. So rather than going through the unnecessary hassle of gradual accumulation, we’re looking to acquire the Jupiter Fund’s entire stake in a single block deal.”
“It seems the major investor who placed this purchase request is trying to accumulate a substantial number of Midopa Department Store shares, isn’t he?”

When Eric asked with an expression of keen interest, Chen simply offered an awkward smile without responding.
He was clearly growing quite irritated by the persistent questioning.

“To be honest, while we do hold shares in the company, it doesn’t offer particularly generous dividends, and the competition is fierce, so it’s not especially attractive. I’m genuinely curious why anyone would want to accumulate such a large stake.”

Eric lowered his voice slightly and probed him with subtle insinuation.

“Are you perhaps attempting an M&A?”
“Haha. You certainly have a sense of humor. Even if I genuinely harbored such intentions, with foreign ownership capped at 18%, how could we possibly execute an M&A?”

David Chen denied it as though the very notion were absurd.
Yet Eric Burnas, maintaining an air of composure, caught the momentary flicker of bewilderment that crossed his counterpart’s face before vanishing.

‘I’ve struck a nerve.’

When someone suddenly began accumulating massive quantities of a particular stock, there were only two possible explanations: they possessed knowledge of some extraordinary catalyst unknown to the market, or they were orchestrating an M&A.

‘Given the circumstances surrounding the newly constructed Gangnam Branch, there’s no prospect of dividend increases or other favorable catalysts for years to come. That leaves only hostile acquisition as the remaining option.’

David Chen was feigning ignorance as well, but he recognized that Eric had detected something amiss.
It was only natural—in the cutthroat financial jungle of Hong Kong, no one was naive enough to accept at face value the evasions of someone proposing a transaction of this magnitude.
Yet the very fact that his counterpart had proposed a block deal despite this suggested either that he had already accumulated sufficient shares to render a hostile takeover irrelevant, or that he was preparing to launch a full-scale acquisition campaign.
David Chen’s smile faded as he fixed Eric with a direct gaze and posed his question.

“Will you conduct business with us?”

Eric, by contrast, responded with unhurried ease, crossing his arms.

“Well, this is quite an unexpected proposal, and it’s not a decision I can make unilaterally. I’m afraid I cannot provide you with an immediate answer here.”
“Ah, of course. I only wish to know one thing—whether you’d be willing to sell your stake.”
“That would depend entirely on the terms.”
“We’d be prepared to offer a 30% premium over the current price.”

Eric stroked his chin with an expression of mild displeasure.

“The stock price has fallen considerably—well below our average acquisition cost. A 30% premium, frankly, isn’t particularly compelling.”
“What figure would you find acceptable?”

Eric paused as though deliberating, then lifted his head to speak.

“I’d need at least a 60% premium before I could even consider entertaining a sale.”

He had doubled the premium outright, yet framed it not as a selling price but merely as something worth considering.
Confronted with such brazen audacity, David Chen’s brow furrowed and he silently cursed under his breath.
It was transparent that Eric knew of the share accumulation and was attempting to extract maximum value.
Though irritated, David Chen recognized that given the foreign ownership cap, the Midopa Department Store shares Eric held were indispensable, so he took pains to conceal his displeasure.

“As you mentioned earlier, Midopa Department Store’s stock price has fallen quite a bit. Isn’t that price rather steep?”
“You were the one who first asked to sell your stake. If you think it’s too expensive, then simply don’t buy it.”

Eric Burnas’s leisurely response felt infuriatingly dismissive.
But since the other party held all the cards, David Chen couldn’t help but grimace inwardly.

‘Damn it, things are getting complicated.’

Having anticipated to some degree that the other side would play it this way from the start, David Chen spoke with a somewhat disgruntled expression.

“I understand. Since you mentioned needing time to discuss this, how about we meet again tomorrow and continue our conversation?”
“Let’s do that.”

Shortly after parting with David Chen, Eric Burnas exited the Hotel and climbed into one of the taxis lined up in front of the main entrance.
As he closed the rear door, a Taxi Driver who appeared to be in his forties glanced back and asked.

“Where shall I take you?”
“Central, please.”
“Understood.”

As the taxi pulled away, Eric Burnas glanced back once at the Hotel’s main entrance receding into the distance, then pulled out his phone from his inner pocket.
He entered a number with his finger and pressed the call button. After a brief ring tone, the other party answered immediately.

[Hello?]
“Landon Shore. It’s Eric.”

Though it was the middle of the night in New York, Landon Shore had been waiting, knowing that Eric Burnas would be meeting with someone from Peregrine Securities Hong Kong today.

[How did it go?]
“As expected, they approached me about selling my stake in Midopa Department Store.”
[I thought as much. Got it. I want you to gather as much information as possible about Peregrine Securities’ movements over there and report back to me.]
“Understood.”

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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