Free Web NovelThe winner’s curse.
A company defeats numerous competitors and succeeds in an acquisition, yet pays such an excessive price in the process that it fails to gain the expected profits—and sometimes even drags the acquired company into financial distress.
It was a phenomenon occasionally seen in the M&A market. A victory in name only, leaving nothing but wounds behind.
“You cannot raise the acquisition price any further.”
Arthur Ochs Sulzberger Jr. and George Soros were locked in a fierce exchange.
“The cost can be covered by our fund.”
“Covering the entire acquisition cost with the Soros Fund in exchange for shares from our family is an excessive demand.”
“I’m not asking for shares. I’m simply asking you to provide collateral.”
“Isn’t that the same thing?”
Sulzberger Jr. shot back sharply.
Threatening the management rights of The New York Times in order to acquire The Wall Street Journal was putting the cart before the horse.
“You said you wanted to acquire The Wall Street Journal. That’s why we joined hands, isn’t it?”
George Soros protested, but Sulzberger Jr. shook his head firmly.
“We will withdraw here. The New York Times alone is sufficient. I have no intention of destabilizing The New York Times over unnecessary greed.”
“Ha······. That puts us in a difficult position.”
Soros sighed and glared at Sulzberger Jr.
Their blazing gazes collided in midair.
The reason George Soros had entered the bidding war alongside The New York Times was simple.
The weight of the name The New York Times.
With that name backing him, he believed that even if there was a slight difference in the acquisition price, they could defeat Dream High.
The Sulzberger family had also made several attempts in the past to acquire Dow Jones.
But the problem was that things had not unfolded as Soros expected.
News Corporation and the Dream High consortium showed no intention of abandoning the acquisition. They kept raising their bid.
To win, they too would have to raise the price.
“And what exactly do you mean by difficult?”
“If we fail in this acquisition, everyone will laugh at The New York Times. They’ll say America’s flagship daily was defeated by Murdoch and fled with its tail between its legs.”
“What did you just say? Soros! You truly have no restraint.”
“Isn’t it true? If you were going to withdraw, you shouldn’t have entered in the first place. If you back out now, it will look like fear.”
Sulzberger Jr.’s face twisted at Soros’s provocation.
“Soros. Watch your words.”
“If you lack confidence, you may withdraw. But if you let go of the hand I offered, you will regret it. Those connected to me will pull all advertising from The New York Times, and······.”
Sulzberger Jr. slammed the table, cutting him off.
“Are you daring to threaten me, Sulzberger Jr.? Go ahead and try!”
“Let’s see if you still say that when the advertising revenue dries up. Especially given that your financial state isn’t strong to begin with.”
“You—!”
Sulzberger Jr.’s face reddened as he ground his teeth, but Soros only scoffed.
“This is no time to relax simply because you believe your management control is secure. Today it’s The Wall Street Journal. Who knows? Tomorrow it may be The New York Times on the auction block.”
Sulzberger Jr. could no longer endure it and rose abruptly.
“Do as you please. I will withdraw from the Dow Jones acquisition.”
He left the room without another word.
Left alone, George Soros bit his lip hard enough that blood seeped between his teeth.
“······I cannot lose to Dream High again like this. Even if I must do it alone. I’ll demand more capital.”
Muttering through clenched teeth, Soros stood and left the conference room.
* * *
Han Kyungyeong, Murdoch, and I met with the Dow Jones board once more for the final negotiation.
After brief pleasantries, the real talks began.
I did not intervene. I simply crossed my arms and observed how Han Kyungyeong handled it.
Han Kyungyeong and Murdoch had clearly sharpened their teeth. They had examined Dow Jones’s financial state even more thoroughly than before. ƒгeewebnovёl.com
Using that as leverage, Han Kyungyeong pressed the board relentlessly.
“If you reject this proposal as well, we will withdraw from the acquisition.”
He closed the documents and raised both hands slightly.
I watched him with interest.
We didn’t discuss that move beforehand. He even knows how to provoke now. You’ve grown, hyung.
“What do you mean withdraw?”
“We have already made considerable concessions. You know that. There is nothing more we can concede.”
“Well, that’s······.”
“You say you will sell shares but demand guaranteed management control. How does that make any sense?”
At Han Kyungyeong’s criticism, John Bancroft merely opened and closed his mouth.
“Seventy-five dollars per share. That’s over 6.5 billion dollars in total. That’s more than forty-five times Dow Jones’s operating profit. We’re paying that price to acquire the company, yet you demand control remain untouched? It was none other than this board that led Dow Jones to its current state.”
John Bancroft protested heatedly.
“Isn’t that excessive?”
“Excessive? Was it not excessive to disregard Chairman Murdoch? If you wish to be respected, you should have respected him.”
“That was not our intention—”
Han Kyungyeong waved his hand dismissively.
“To be honest, Dow Jones is not an attractive asset from an investment standpoint. Its growth potential is limited. And yet Chairman Murdoch made this concession for the sake of his dream, promising tremendous profit to shareholders. If this continues, we will withdraw.”
His tone was casual, but every word was accurate.
“Let me repeat. Seventy-five dollars per share. We will not raise it further. Decide. If you refuse again, Dream High will join minority shareholders and file suit against this management for violating shareholder interests. We own three percent of Dow Jones.”
He applied pressure without hesitation.
No one on the board dared to speak immediately.
John sighed and turned to look at me.
“Hoo······. You are the owner of Dream High, correct?”
His tone was far more respectful than before. I shrugged.
“Why do you think so?”
“Do you think we wouldn’t know who you are?”
There was no reason to lie. I nodded lightly.
“There is no more room for negotiation?”
“Well. I have little interest.”
“No interest? Then why has Dream High been so aggressive—”
“I may have no interest. Chairman Murdoch does. I merely told him to do whatever it takes to fulfill his long-held wish.”
My calm response made John uneasy.
“If it were not Chairman Murdoch’s dream, we would never acquire Dow Jones at such an absurd price—6.5 billion dollars. What do you believe Dow Jones is worth? Generously, perhaps two billion. Growth potential? With the market shifting to the internet, the future is uncertain.”
John let out a pained groan and closed his eyes.
I tapped the document on the table.
“Face reality. Dow Jones is not worth that much. But Murdoch’s dream cannot be measured. That’s why we placed the bet. Even if not now, there would be other opportunities. The only reason we ❀ Nоvеlігht ❀ (Don’t copy, read here) entered this bid is to make Murdoch’s dream come true. To me, The Wall Street Journal is neither more nor less than that.”
“But our Journal has over a century of history—”
“If you value history and tradition, relinquish your attachment to money. We will offer thirty dollars per share—its true value. In return, we will fully guarantee editorial independence, just as you have operated.”
“That’s absurd.”
I let out a laugh.
“Yes, it is absurd. You’ve heard seventy-five dollars. Why do you keep insisting on the impossible? It’s absurd for us as well.”
Silence fell.
“Choose one, only one. Money or honor. Pick one.”
John’s face went pale.
“You refuse the proposal to preserve your honor. Fine. Suppose you sell to The New York Times instead. If we withdraw, do you truly believe they will honor their offer unchanged? Before signing, an offer is just an offer. No legal binding force.”
Excessive greed invites disaster—especially when you have only a name and no power.
“Sign while competitors remain. If you reject us again, we will walk away.”
I leaned back and crossed my arms.
“One final thing. Neither Dream High nor Chairman Murdoch is doing this to make money from The Wall Street Journal. If that were the goal, we would never pay such a mad price.”
I fell silent.
A younger-looking director raised his hand.
“Head of the family. Let’s stop being greedy.”
Ignoring the glares of the older members, he continued.
“If this continues, we will collapse. Are we truly going to hand this company to the Sulzberger family? I do not consider that more honorable. I will not agree to that.”
Several directors nodded.
“Oliver. This is not your place to speak!”
“I am a family member and a board director. I have every right.”
“You insolent—!”
An elderly man rose, pointing.
But Oliver did not waver.
“We failed. Then at least we must keep the money.”
“Money is—!”
“Uncle Eden. Please! Please stop pretending. It’s time to face reality.”
The board split openly into two factions.
John struck the table.
“Enough. What are you doing in front of outsiders?”
He looked ten years older as he pressed his forehead.
“Please leave. We will respond within three days.”
Han Kyungyeong looked at me. I nodded.
“We await your answer.”
Outside, we smiled.
“They’ll sell to us?” Han Kyungyeong asked.
“Most likely. Oliver spoke at the right time. More of them would rather take the money than suffer the humiliation of selling to the Sulzberger family.”
Murdoch remained silent until we reached our cars.
“Charlie.”
“Yes, Chairman Murdoch.”
“Thank you. For respecting my dream.”
“We are in the same boat. You respect me; I respect you. We began as business partners. Now we can call each other friends. If I can fulfill a friend’s dream, money is irrelevant.”
Murdoch’s eyes reddened.
“You’ve carried this dream for decades. It’s time to realize it.”
“I will do my utmost to support you, Charlie.”
“You are the vanguard. How you act will determine the battlefield. I’m counting on you.”
We shook hands.
And three days later—
Dow Jones fell into Murdoch’s hands.
