Chapter 441: Short of Cash Again

Chapter 441: Chapter 441: Short of Cash Again

It could be said that securing Lucasfilm meant directly capturing half of Hollywood’s film and television industry, completely filling the shortcomings of the entire industrial chain in film production, special effects, sound effects, and IP development, and building the foundation of a truly top-tier media empire.

But precisely because of its large scale, high value, and wide involvement, this acquisition negotiation was far more cumbersome and rigorous than any previous transaction.

Even though Irene and George Lucas were as close as father and daughter, trusted each other, and were of one mind—with one genuinely wanting to sell and the other sincerely wanting to buy, with no malicious price-hiking or deliberate obstruction—the required procedures, valuation calculations, transaction terms to be finalised, and matching transaction prices could not be omitted in a single item.

As an industry legendary tycoon, George Lucas not only had to be responsible for his life’s work of half a lifetime, but also for the company’s remaining shareholders, team employees, and industry reputation.

He could never casually sell off his foundation at a low price out of personal affection, which would both harm shareholders’ interests and ruin the industry face he had accumulated over decades.

Therefore, the entire negotiation always maintained professional, rigorous, and fair capital transaction standards on the basis of emotional tacit understanding.

After three rounds of rigorous and meticulous multi-round negotiations, asset accounting, equity valuation, and team liquidation, the two sides finally preliminarily finalised the overall transaction price—three billion US dollars.

Three billion US dollars, in the present year of 2005, was an astronomical figure sufficient to shake the entire Hollywood capital circle. Even for a top-tier media company, it was a huge sum of cash that was difficult to cough up all at once.

The biggest problem Irene faced at this moment was precisely the funding gap.

Everyone in the outside world thought she held several blockbuster films, was worth billions, and had abundant cash flow. Little did they know that most of her assets were equity, real estate, and project valuations, and the liquid cash in her hands had never been particularly abundant.

She had always been accustomed to continuously investing profits into new projects, new industries, and new layouts to constantly expand her business empire, rarely retaining large amounts of idle cash.

Counting recent capital investments and reservation plans, her cash flow had long been occupied layer by layer.

Previously, acquiring a private TV station cost tens of millions of dollars at once, completely emptying part of the previously accumulated cash

Building the trump-card variety show IP The Voice, from team formation, venue construction, mentor invitations, program recording to publicity landing, it required at least fifty million US dollars in working capital to be reserved

At the same time, the preparation and commencement of two major key new projects, The Pursuit of Happyness and The Devil Wears Prada, required actor remuneration, scene construction, crew operations, and post-production, reserving at least two hundred million US dollars in working capital as a guarantee to ensure the smooth progress of the projects.

With multiple expenses superimposed, the state of only outflow and no inflow made the idle cash in her hands a drop in the bucket, far from being able to cover the total acquisition price of three billion.

The only major source of returned funds was the newly-off-screen super blockbuster Pirates of the Caribbean: Dead Man’s Chest.

This sequel once again refreshed global film history records, raking in 63.5 million US dollars on its opening day, directly breaking the global single-day box office record; its opening week box office soared to 157 million US dollars, setting a new annual opening week box office high

Its final North American domestic box office accumulated 569 million US dollars, and its global total box office exceeded 1.224 billion US dollars, becoming the third film in film history to successfully break the one-billion-dollar mark, and it took only 52 days to complete the one-billion box office breakthrough, refreshing the fastest record for global box office breaking one billion, with brilliant achievements and unmatched by anyone.

According to the investment ratio and revenue-sharing agreement, this super blockbuster could bring Irene an extremely lucrative dividend income, which was enough to substantially fill the funding gap.

However, the film and television revenue-sharing process was cumbersome and the return cycle was long. After box office settlement, theatre chain revenue-sharing, tax accounting, and layers of approval were completed, it would still take at least one year for this huge dividend to completely flow into her personal account.

Even if George Lucas was willing to give her enough time to raise funds, a one-year cycle was still barely enough, and even if she waited for the dividends to arrive in full, there was still a considerable capital gap from the three billion acquisition total price, making it impossible to fully cover the transaction amount.

Capital faulting and a huge gap instantly became the biggest obstacle blocking this top-tier acquisition.

In response to the current financial dilemma, Irene’s Chief Financial Officer Jean Williams sorted out a complete solution at the first instance and took the initiative to go to the office to interface with Irene and discuss countermeasures.

Jean Williams had been deeply cultivated in the financial and accounting field for many years and had followed Irene for many years, handling the capital circulation, equity changes, and project investments of all her industries throughout the process.

She knew her asset structure, cash flow status, and equity layout like the back of her hand, possessed extremely strong professional abilities, and was steady and sophisticated in handling affairs.

"Boss, paying the full three billion in cash is completely unrealistic right now. Your liquid cash is not enough to support this transaction. If you forcibly sell real estate or short-term dump stocks, it will not only cause serious losses, but also trigger panic in the capital market, and the loss outweighs the gain." Jean said in a rigorous tone, objectively analysing the current dilemma and directly vetoing the radical cash-out method.

"Combining all your asset structures, I have drawn up a compromise and secure transaction model: partial cash payment + medium- and long-term instalment payment + equity replacement. Combining these three models will completely solve the funding gap."

Pointing to the clear asset structure on the report, Jean continued to meticulously disassemble:

"Among the industries under your name, Echo Pictures is a private asset wholly owned by you at one hundred percent, without any external shareholders or equity disputes, making it suitable as a long-term bottom-line asset, but not suitable for splitting and replacement.

In addition, most of the media, technology, and entertainment companies you have laid out have diversified shareholder structures with clear equity, transparent valuations, and free tradability, which can completely be used to equivalently exchange for acquisition shares."

"Among them, the one with the highest value, the best liquidity, and the strongest capital market recognition is the listed Facebook stock you hold in your hands."

As the hottest emerging technology listed company at present, Facebook had steadily rising market value, transparent valuation, extremely high equity gold content, strong market recognition, and could be circulated and cashed out at any time.

It had much higher replacement value than real estate, unlisted projects, or private company equity, and was also the high-quality asset that Lucas’s team and George himself could most recognise and accept.

Irene quietly listened to Jean’s professional analysis, her thoughts becoming clearer and clearer in the depths of her eyes. She slightly raised her eyes and decisively ordered:

"Yes. You immediately take the lead in forming a special evaluation team, in conjunction with third-party authoritative valuation institutions, to conduct a comprehensive, precise, and meticulous value evaluation on all replaceable equity under my name, focusing on Facebook equity and tradable shares of other media and technology companies."

"The evaluation report needs to clearly list the real-time market value, liquidity, long-term valuation, replacement ratio, and risk coefficient of each equity, accurately calculate the optimal ratio of the three modes of cash + instalments + equity, and match the three billion acquisition total price under the premise of ensuring that our assets do not depreciate and our equity is not excessively diluted."

"Synchronise the report to me at the very first moment after it is completed. With the complete evaluation plan, we will conduct a new round of negotiations with the shareholder team and legal team of Lucasfilm."

Jean immediately nodded: "Understood. I will immediately launch the special work, produce an accurate and complete valuation plan in the shortest possible time, steadily promote subsequent negotiations, maximise the protection of your asset rights and interests, and successfully land the acquisition transaction."